Disclaimer: This article is for informational purposes only and does not constitute financial advice.
📌 Key Research Highlights
- Broker: Kiwoom Securities
- Investment Rating: Buy (Maintained)
- Target Price: 350,000 KRW (~$258.95 USD based on 1352 KRW/USD)
- Core Thesis: While short-term earnings may face headwinds from general memory price volatility and FX rates, long-term value is driven by market share expansion in High Bandwidth Memory (HBM) and Foundry services.
Investment Thesis and Target Price
Kiwoom Securities maintains a Buy rating and a Target Price of 350,000 KRW (~$258.95 USD based on 1352 KRW/USD), designating Samsung Electronics as the industry Top Pick. The analyst suggests a strategic shift in the investment narrative: moving away from relying on “general memory price surges” toward “market share expansion in HBM and Foundry.” This shift is prompted by increasing price pressure in general memory due to competition with Chinese players such as CXMT and YMTC. The brokerage recommends a buy approach from a mid-to-long-term perspective as HBM and Foundry establish themselves as new growth engines.
Earnings Estimates and Financial Preview
3Q26 Preview: Operating profit is estimated at 107 trillion KRW (~$79.14B USD), which is expected to be an Earnings Miss relative to the broker’s previous forecast of 122 trillion KRW (~$90.23B USD). Revenue is projected at 198 trillion KRW (~$146.45B USD, +15% QoQ). The downward revision is attributed to a sharper-than-expected decline in the average KRW/USD exchange rate and a lower-than-expected price increase for general DRAM (+12% vs. previous +20%).
3Q26 Divisional Operating Profit Estimates:
- DS (Device Solutions): 107.3 trillion KRW (~$79.36B USD, +20% QoQ)
- SDC (Samsung Display): 1.1 trillion KRW (~$0.81B USD, +51% QoQ)
- MX/NW: -1.7 trillion KRW (~$-1.26B USD, continuing deficit)
- VD/DA: -0.1 trillion KRW (~$-0.07B USD, continuing deficit)
4Q26 Outlook: Revenue is forecast at 200 trillion KRW (~$147.85B USD, +1% QoQ) and operating profit at 111 trillion KRW (~$82.10B USD, +4% QoQ). While general DRAM (+3% QoQ) and NAND Flash (+12% QoQ) price growth is expected to stabilize due to consumer demand weakness and price resistance, growth will be sustained by HBM and Foundry.
Key Semiconductor Drivers and Catalysts
The report identifies several critical technological and market catalysts for the DS division:
- HBM Momentum: The HBM segment continues strong growth. In 4Q26, HBM4 is expected to account for more than half of the product sales mix, driving significant revenue expansion.
- Foundry & S.LSI: Profitability is expected to improve through the mass production of HBM4 base dies and the expanded production of the Exynos 2700. Furthermore, the mass production of the Exynos 2800 in 4Q26 is cited as a key driver for continued revenue growth.
- Market Positioning: Despite competitive pressures in the commodity memory market, the expansion of the HBM and Foundry portfolios is viewed as the primary catalyst for long-term valuation recovery.
🔗 Original Source: View the official filing/article here.