This year’s operating profit is expected to approach 50 yen
Increasing demand for semiconductors and even the Galaxy S21 effect… Performance improvement in all sectors expected
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[아시아경제 이민우 기자] Samsung Electronics, which recorded 90,000 won during the day before, is expected to exceed 10 trillion won in operating profit in the first quarter of this year. It is analyzed that growth will emerge on the back of rising DRAM prices and the effect of early launch of the Galaxy S21.
On the 9th, Hi Investment & Securities predicted that Samsung Electronics will generate sales of 60,706 trillion won and operating profit of 10.72 trillion won in the first quarter of this year. It is analyzed that sales and operating profit will increase by 9.7% and 56.2% compared to the same period last year. Despite the decline in profits in the consumer electronics (CE) and display divisions, the semiconductor division’s earnings recovery and the smartphone (IM) division’s improvement are expected to be the main benefit.
First of all, it was initially expected that the average DRAM mixed selling price (ASP) in the first quarter of this year would decrease slightly, but rather, it is expected to increase by 2-3%. This is because some US IDC companies’ orders for server DRAM as well as PC and mobile DRAM, which are expected to increase in customer order in the first quarter of this year, are expected to increase, while semiconductor companies’ inventory is extremely low, resulting in a supply shortage. As for the ASP by division, PC DRAM rises 5%, server DRAM rises 3%, and mobile DRAM is estimated to be maintained. The NAND flash ASP is also falling only 3~4%, and the drop is expected to significantly narrow QoQ.
In the IM segment, smartphone shipments are expected to increase to 73.5 million units due to the early launch of the Galaxy S21 and the effect of inventory clearance in the fourth quarter of last year. In addition, as the proportion of high-end phones increases, operating profit is expected to increase to KRW 3.94 trillion. This is a 48.9% increase from the same period last year.
Samsung Electronics’ quarterly operating profit is expected to improve in earnest from 3Q on the back of an increase in semiconductor shipments and an increase in ASP. Hi Investment & Securities predicted that Samsung Electronics will generate 25.5 trillion won in sales and 49,84 trillion won in operating profit this year, reflecting the faster-than-expected improvement in the semiconductor industry. This is an increase from the previous forecasts of KRW 25.1 trillion and KRW 47 trillion. Compared to the same period of the previous year, this was an increase of 7.8% and 38.6%, respectively.
Against this backdrop, we maintained our BUY rating on Samsung Electronics and raised our target price from KRW 96,000 to KRW 100,000. The previous day’s closing price was 82,900 won. It was once recorded 90,000 won during the week. Song Myung-seop, a researcher at Hi Investment & Securities, said, “Samsung Electronics’ first quarter results and overall results this year are expected to exceed market expectations, and semiconductor companies are expected to maintain their production facilities at the level of last year despite the recovery of the market and increasing customer orders. It is expected,” he said. “As global liquidity, which has historically had a decisive influence on the valuation multiples of IT stocks including Samsung Electronics, is at a record high, it is likely that the stock price will continue to rise for the time being. It is high,” he explained.
Reporter Lee Min-woo [email protected]