Disclaimer: This article is for informational purposes only and does not constitute financial advice.
📌 Key Research Highlights
- Broker: IBK Securities | Rating: Buy (Maintained)
- Target Price: 460,000 KRW (~$340.49 USD based on 1351 KRW/USD)
- Core Thesis: Despite short-term FX headwinds, the company is entering a phase of massive profitability with quarterly operating profits exceeding 100 trillion KRW, supported by a prolonged memory supply shortage and aggressive shareholder return strategies.
Investment Thesis and Target Price
IBK Securities maintains a Buy rating and a Target Price of 460,000 KRW (~$340.49 USD based on 1351 KRW/USD). The analyst views the stock as being in a state of significant undervaluation. The valuation is supported by the expectation that the memory supply shortage will persist over the long term, ensuring that profitability remains at current high levels while the overall scale of profit grows stably.
Earnings Estimates and Financial Preview
For 3Q26, revenue is projected at 195.2 trillion KRW (~$144.5B USD), a 13.8% increase Quarter-over-Quarter (QoQ). Operating profit is estimated at 101.7 trillion KRW (~$75.2B USD), representing a 13.6% QoQ increase, with an operating margin of 52.1%.
Divisional Breakdown (3Q26 Estimates):
- DS (Semiconductor): Revenue of 149.9 trillion KRW (~$110.9B USD) and Operating Profit of 101.8 trillion KRW (~$75.3B USD).
- Display: Revenue of 8.8 trillion KRW (~$6.5B USD) and Operating Profit of 0.9 trillion KRW (~$666.2M USD).
- MX/Network: Revenue of 34.3 trillion KRW (~$25.4B USD) and an Operating Loss of 1.1 trillion KRW (~$814.2M USD).
- VD/Consumer Electronics: Expected to see an increase in the scale of operating losses.
Annual Forecasts: For FY2026, the analyst forecasts total revenue of 701.4 trillion KRW (~$519.2B USD) and operating profit of 356.9 trillion KRW (~$264.1B USD). For FY2027, these figures are expected to rise to 957.4 trillion KRW (~$708.7B USD) in revenue and 585.4 trillion KRW (~$433.3B USD) in operating profit.
Key Semiconductor Drivers and Catalysts
- HBM4 Roadmap: HBM4 is expected to become the main product starting in 2H26. Its share of the mix is projected to be around 40% in 3Q26 and exceed 60% in 4Q26. While the overall HBM market size for 2026 may shrink compared to previous forecasts due to delayed launches, Samsung’s market share is expected to be higher than initial early-year expectations.
- HBM Profitability: With HBM4 pricing for 2027 recently finalized, the analyst expects profitability levels comparable to DRAM. HBM is projected to become a significant driver of operating profit improvement starting with 2027 volumes.
- AI Demand: Despite discussions among AI leaders (Meta, Google, SpaceX) regarding the need to moderate the speed of AI development, the analyst believes this will not slow down overall demand. The evolution toward “Agent AI” is expected to sharply increase the requirement for memory.
- Shareholder Returns: Massive shareholder returns are expected in 2026, totaling approximately 100 trillion KRW (~$74B USD), primarily through dividends (maintaining a 25% payout ratio) and potential treasury stock buybacks of around 20 trillion KRW (~$14.8B USD).
🔗 Original Source: View the official filing/article here.