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 (~$434.78 USD based on 1334 KRW/USD)
- Core Thesis: Record-breaking 3Q26 results driven by HBM4 market share recovery and strong memory ASP growth, supported by long-term supply agreements (LTA) and aggressive shareholder returns.
Investment Thesis and Target Price
Hanwha Investment & Securities maintains a Buy rating with a Target Price of 580,000 KRW (~$434.78 USD based on 1334 KRW/USD). The analyst views the recovery of competitiveness in the HBM4 market as a pivotal turning point, effectively resolving previous concerns regarding market share. The valuation is supported by improved earnings visibility and sustainability resulting from structural supply constraints and the expansion of Long-Term Agreements (LTAs). The brokerage expects EPS growth to drive the stock in 2027, followed by a valuation re-rating in 2028 as the LTA effects fully materialize, reducing earnings volatility.
Earnings Estimates and Financial Preview
Samsung Electronics achieved record-breaking quarterly results in 3Q26:
- Revenue: 195.3 trillion KRW (~$146.4B USD), representing a 14% increase Quarter-over-Quarter (QoQ) and a 127% increase Year-over-Year (YoY).
- Operating Profit: 107.4 trillion KRW (~$80.5B USD), up 20% QoQ and 783% YoY.
- Operating Margin: 55%, achieved despite a negative foreign exchange impact of approximately 10 trillion KRW (~$7.5B USD).
- ASP Trends: DRAM ASP increased by approximately 20% QoQ, while NAND ASP rose by high double digits (late 10% range).
Key Semiconductor Drivers and Catalysts
1. HBM4 and HBM4E Roadmap:
3Q26 HBM4 revenue increased more than 3x QoQ, now accounting for 60% of total HBM sales. The company has early achieved its goal of securing an HBM market position commensurate with its overall DRAM market share. HBM4 supply volumes for 2027 have been negotiated at target price levels. HBM4E is scheduled for mass production in 1H27, with significant volume expansion in 2H27.
2. Structural Supply Constraints:
Supply shortages are expected to persist until 2028. Despite increased CAPEX in 2027, the impact on actual bit growth will be limited due to lead times for new facility acquisition and rising equipment costs.
3. Long-Term Agreements (LTA):
Samsung has signed LTAs with 10 large customers and is negotiating with 10 more, expanding beyond hyperscalers to mobile and automotive sectors. The company aims to secure 60-70% of total capacity via LTAs by 2030.
4. NAND and Other Drivers:
Growth in NAND is expected to be driven by increased KV cache utilization following the adoption of Agentic AI and rising demand for high-capacity storage.
5. Shareholder Returns:
Total shareholder returns for 2026 are targeted at 90-110 trillion KRW (~$67.5B – $82.5B USD). After accounting for 35 trillion KRW (~$26.2B USD) already executed, the remaining 55-75 trillion KRW (~$41.2B – $56.2B USD) will be used for cash dividends and significant treasury stock buybacks and cancellations.
🔗 Original Source: View the official filing/article here.