Disclaimer: This article is for informational purposes only and does not constitute financial advice.
📌 Key Research Highlights
- Broker: Shinhan Securities | Rating: Buy (Maintained)
- Target Price: 450,000 KRW (~$337.33 USD based on 1334 KRW/USD)
- Core Thesis: Strong fundamentals driven by HBM4 shipment expansion and high-capacity NAND demand, offsetting short-term shareholder return disappointments.
- Financial Outlook: Upward revisions for 4Q26 and FY2027 estimates due to higher-than-expected memory shipment guidance.
Investment Thesis and Target Price
Shinhan Securities maintains a Buy rating and a Target Price of 450,000 KRW (~$337.33 USD based on 1334 KRW/USD). The valuation is based on a target PBR of 3.2x, aligned with DRAM peer averages, reflecting improved HBM competitiveness and an expansion of Long-Term Agreements (LTA) from 35% to 50% of capacity. The analyst highlights Samsung’s “turnkey” capability in cHBM based on its internal foundry infrastructure as a key differentiator. The firm anticipates that the supply-demand imbalance will persist through 2028, increasing the likelihood of achieving a target LTA proportion of 60-70% of total capacity by 2030.
Earnings Estimates and Financial Preview
3Q26 Review: Revenue reached 195.3 trillion KRW (~$146.4B USD), up 13.8% QoQ, with Operating Profit at 107.4 trillion KRW (~$80.5B USD), up 20.1% QoQ. Performance was driven by memory price increases (DRAM +19%, NAND +18%) and improved non-memory utilization, despite a negative currency headwind of approximately 10 trillion KRW (~$7.5B USD).
4Q26 Forecast: Revenue is projected at 212.4 trillion KRW (~$159.2B USD) (+9% QoQ) and Operating Profit at 126.1 trillion KRW (~$94.5B USD) (+17% QoQ). Memory Bit Growth (B/G) estimates have been revised upward to 17% for DRAM and 14% for NAND.
Long-term Estimates:
- FY2026F: Revenue 713.0 trillion KRW (~$534.5B USD) / Operating Profit 380.3 trillion KRW (~$285.1B USD)
- FY2027F: Revenue 980.0 trillion KRW (~$734.6B USD) / Operating Profit 629.1 trillion KRW (~$471.6B USD)
The analyst raised 2027 revenue and operating profit estimates by 11% and 19%, respectively.
Key Semiconductor Drivers and Catalysts
- HBM4 Momentum: 3Q26 HBM4 revenue increased more than 3x QoQ. 2027 HBM volumes are reported as “sold out” with negotiations completed at target price levels.
- Memory Supply-Demand: Tight supply is expected to persist through 2028 due to AI infrastructure competition and the proliferation of AI agents. The transition to HBM4E/HBM5 is expected to further cannibalize general DRAM production capacity.
- LTA Expansion: Contracts are completed with 10 major customers, with another 10 under negotiation. The customer base is expanding from CSPs and Server OEMs to mobile, automotive, and network sectors.
- Foundry & Advanced Packaging: Secured 2nm projects for large CSPs and AI HPC in 3Q. The HPC proportion of the foundry business is expected to exceed 50% by 2027. The Taylor Fab1 is proceeding on schedule with cleanroom operations and equipment move-in.
🔗 Original Source: View the official filing/article here.