Samsung Electronics, 1Q surprise results… ‘Smartphone-Home Appliance’ Twinkle

In the first quarter of last year, Samsung Electronics achieved surprising results despite the continuing situation of the new virus infection (Corona 19). While the semiconductor business slowed, the smartphone and home appliance businesses contributed to the earnings growth.

Samsung Electronics announced on the 7th that its operating profit in the first quarter of last year rose 44.1% year-on-year to 9.3 trillion won.

Sales amounted to 65 trillion won, up 17.4% over the same period. Compared to the previous quarter, sales and operating profit increased by 5.6% and 2.7%. In terms of sales, it is comparable to the record high in the third quarter of last year (66.96 trillion won), and the operating profit is far exceeding the market’s forecast (consensus) of 8.9 trillion won.

These results are evaluated as having been a major success in the set business while the semiconductor business was stagnant due to external risks.

In the semiconductor business, the increase in global DRAM spot prices was not reflected in the fixed transaction price, so the impact on earnings was negligible. In addition, it is analyzed that the shutdown of the Austin plant due to the cold wave in Texas, USA, was partly affected.

The brokerage industry believes that the Austin Foundry plant was delayed for more than a month, resulting in a loss of around 300 billion won in terms of sales, which led to a decrease in operating profit.

On the other hand, for the set division, the continued recovery of global consumption appears to be a positive factor.

In the case of the mobile (IM) division, which operates the smartphone business, it is analyzed that the success of the early launch of the’Galaxy S 21′ and the success of the box office led to an increase in earnings. As of the 26th of last month, 57 days after the release of the Galaxy S21, sales exceeded 1 million units, which is a month faster than the previous game.

In addition, market penetration through aggressive pricing policies of the low-end model Galaxy A series also led to strong earnings. For the first time in the Galaxy A series, Samsung Electronics held a separate unpack (a new product release event) and devoted its efforts to global marketing. Through this, the operating profit of the IM division is expected to reach 4.30 trillion won.

The consumer electronics sector, including TV, is also on the rise at the end of last year. The launch of high-priced new products such as Neo QLED at the beginning of this year led to increased sales by strengthening the promotion of existing premium QLED TVs and LCD TVs.

‘Bespoke’, a customized home appliance, is gaining popularity among young people, including newlyweds, and the recent launch of overseas sales also affected earnings improvement. The consumer electronics (CE) division’s operating profit is estimated to be close to KRW 1 trillion.

In the second quarter of this year, as memory prices are rising, the semiconductor division’s earnings are expected to grow.

From 2Q, the center of memory demand is expected to move from mobile to server, and server customers are being detected to resume purchases. Memory price increases are expected to be driven by servers, and both DRAM and NAND prices are expected to exceed market expectations.