Disclaimer: This article is for informational purposes only and does not constitute financial advice.
📌 Key Research Highlights
- Broker: Hanwha Investment & Securities
- Investment Rating: Buy (Maintained)
- Target Price: 580,000 KRW (~$433 USD based on 1339 KRW/USD)
- Core Thesis: HBM4 is expected to be the primary growth engine for 2027, leveraging synergies between Memory and Foundry capabilities to drive significant revenue and operating profit upgrades.
Investment Thesis and Target Price
Hanwha Investment & Securities maintains a Buy rating and a Target Price of 580,000 KRW (~$433 USD based on 1339 KRW/USD). The valuation is derived using a P/E multiple approach, specifically multiplying the 2027F EPS of 94,073 KRW (~$70 USD) by a Target P/E of 6.2x.
The analyst posits that the growth momentum in the memory industry will shift from conventional memory to High Bandwidth Memory (HBM) once again. The target price is supported by the expectation that HBM4 will elevate both the company’s technical competitiveness and financial performance to a new level.
Earnings Estimates and Financial Preview
The brokerage has revised its 2027 annual estimates upward based on the rapid increase in ASPs and shipment volumes of HBM4:
- 2027E Revenue: 999 trillion KRW (~$746B USD), representing a Year-over-Year (YoY) increase of 40% (up 5% from previous estimates).
- 2027E Operating Profit: 606 trillion KRW (~$453B USD), representing a YoY increase of 65% (up 8% from previous estimates).
Divisional Breakdown (2027E):
- DS Division Revenue: 791.5 trillion KRW (~$591B USD), with DRAM contributing 544.6 trillion KRW (~$407B USD) and NAND Flash contributing 204.0 trillion KRW (~$152B USD).
- DS Division Operating Profit: 595.6 trillion KRW (~$445B USD), with DRAM contributing 452.2 trillion KRW (~$338B USD) and NAND Flash contributing 146.5 trillion KRW (~$109B USD).
Additionally, the analyst highlights enhanced shareholder return capacity. The company is currently implementing a policy to return 50% of Free Cash Flow (FCF) for the 2024-2026 period, and the projected increase in cash generation from 2027 is expected to further support valuation through potential dividend increases or share buybacks/cancellations.
Key Semiconductor Drivers and Catalysts
HBM4 as a Proof of Integrated Semiconductor Capability:
HBM4 is identified as the first generation where Samsung’s Memory and Foundry capabilities create a tangible synergy. The product requires advanced DRAM processes, Base Die design, and Foundry process capabilities. By internally producing 1c DRAM and 4nm Base Dies, Samsung has improved performance and power efficiency.
Market Positioning:
The analyst believes Samsung’s HBM4 technical competitiveness has already entered the industry’s leading tier, effectively dispelling previous market concerns regarding its HBM technology. The expansion of HBM4 shipments is expected to act as a catalyst to increase Samsung’s HBM market share and fundamentally change the market’s valuation of its technical prowess.
🔗 Original Source: View the official filing/article here.