Disclaimer: This article is for informational purposes only and does not constitute financial advice.
📌 Key Research Highlights
- Broker: Kiwoom Securities
- Investment Rating: Top Pick (Sector)
- Target Price: Not explicitly provided in the text
- Core Thesis: Transition from price-driven growth to shipment-driven growth in general-purpose memory, with long-term recovery anchored by High Bandwidth Memory (HBM) and HBF growth.
Investment Thesis and Target Price
Kiwoom Securities maintains Samsung Electronics as the Top Pick within the semiconductor sector. The analyst notes that the general-purpose memory cycle has begun shifting from a phase of price increases to a phase of shipment volume growth. While short-term stock price adjustments are expected through the end of the year and early next year due to slowing price momentum, macroeconomic uncertainties, Chinese memory capacity expansion, and the potential YMTC listing, the long-term outlook remains positive. The recovery is expected to be driven by the mid-to-long-term earnings growth potential of High Bandwidth Memory (HBM) and HBF.
Earnings Estimates and Financial Preview
3Q26 Performance (Actuals):
Results were in line with Kiwoom’s estimates. Revenue reached 195 trillion KRW (~$146.2B USD), up 14% QoQ, and Operating Profit was 107 trillion KRW (~$80.2B USD), up 20% QoQ.
- DS (Device Solutions): Operating Profit of 106.5 trillion KRW (~$79.8B USD), +19% QoQ.
- SDC (Samsung Display): Operating Profit of 1.1 trillion KRW (~$824.5M USD), +52% QoQ.
- MX/NW: Operating loss of 0.6 trillion KRW (~$450M USD), continuing deficit.
- VD/DA: Operating loss of 0.2 trillion KRW (~$150M USD), continuing deficit.
4Q26 Forecast:
Revenue is projected at 234 trillion KRW (~$175.4B USD), +20% QoQ, with Operating Profit estimated at 140 trillion KRW (~$104.9B USD), +31% QoQ.
- DS Division: Expected Operating Profit of 140.9 trillion KRW (~$105.6B USD), +32% QoQ. This is driven by price increases in DRAM (+17% QoQ) and NAND Flash (+19% QoQ). However, the Foundry/S.LSI segment is expected to see an expanded operating loss due to one-off costs (e.g., performance bonuses) despite higher utilization rates.
- DX Division: Operating losses are expected to widen due to the rising cost of memory.
- SDC: Slight growth expected due to peak season demand from customers, with an estimated Operating Profit of 1.2 trillion KRW (~$899.5M USD).
Key Semiconductor Drivers and Catalysts
The primary catalyst for the stock’s recovery is the transition of the general-purpose memory cycle toward shipment volume increases. Furthermore, the analyst emphasizes the mid-to-long-term growth potential of HBM as a critical driver for valuation recovery. Despite temporary headwinds from Chinese competitors and macro volatility, the structural growth in AI-related memory is viewed as the dominant long-term catalyst.
🔗 Original Source: View the official filing/article here.