Hana Securities announced on November 12 that it has lowered its target price for Samsung Electronics from 480,000 won to 400,000 won, reflecting the decline in valuations of global semiconductor companies and adjustments in stock market multiples due to high interest rates. However, the firm maintained its 'buy' rating, citing positive assessments of Samsung's high-bandwidth memory (HBM) competitiveness and expected improvements in the memory market.
Kim Rok-ho, a researcher at Hana Securities, stated, "As the multiples of global semiconductor companies have leveled down, we have adjusted our applied multiples downward. In the era of high interest rates, a decline in stock market multiples is inevitable."
He further projected that Samsung Electronics' revenue for 2027 would reach 1,013 trillion won, with operating profit expected to be 624 trillion won, marking increases of 40% and 61%, respectively, compared to the previous year. He noted that operating profit from the memory division is anticipated to exceed 627 trillion won, surpassing the company's overall profit. Notably, HBM supply to major clients is expected to surge starting in the second half of 2026, driving performance growth in 2027.
Kim estimated that HBM revenue would increase nearly sevenfold year-on-year to 91 trillion won, expanding its share within DRAM to 15%, with profitability expected to be similar to that of standard DRAM.
He also identified the expansion of long-term supply contracts as a factor for valuation reassessment. "Securing over 50% of total production capacity through long-term supply contracts will ensure visible performance and contribute to reducing the volatility of memory market performance," he said, while noting that it is necessary to verify the effectiveness of actual contracts amid fluctuations in memory prices.
Kim suggested the possibility of strengthening shareholder return policies, stating, "As the three-year shareholder return policy for 2024 to 2026 concludes, a new policy is expected to be shared at the end of January 2027 during the earnings announcement. There is also a possibility that the policy to use 50% of free cash flow for shareholder returns could be further strengthened."
He emphasized, "As the first semiconductor company to achieve quarterly operating profits exceeding 100 trillion won, and being the largest profit-generating company in 2027, Samsung should move out of the undervalued territory."
* This article has been translated by AI.
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