Mirae Asset Securities (006800.KS) attributed the weak share price of Samsung Electronics (005930.KS) — despite its unveiling of a massive shareholder return plan — to macroeconomic uncertainty. It said the earnings uptrend would continue as the global memory chip market maintains a supply-side advantage, giving the stock renewed upward momentum.
Mirae Asset Securities issued a report on the 26th setting a target price of 370,000 won for Samsung Electronics and maintaining a "buy" rating. Samsung closed the previous regular session at 257,000 won. That target implies about 44% upside from the current level.
On the 21st, Samsung's board approved a shareholder return program worth 90 trillion to 110 trillion won, the largest ever by a South Korean company. The scale is more than five times its previous annual peak. But on the 24th, the first trading day after the announcement, the stock plunged 8.7%, and it failed to rebound on the 25th, extending its slide. Analysts point to the fact that expectations of a large shareholder return of around 100 trillion won had already been priced into the stock as the reason for the weakness.
Mirae Asset Securities forecast Samsung's operating profit at 120 trillion won for the third quarter and 126 trillion won for the fourth quarter this year. Its full-year operating profit forecast for next year is 559 trillion won. The firm said a supplier-favored market would continue as memory demand, driven by expanding global investment in artificial intelligence (AI), remains solid. It also assessed concerns over a memory oversupply from China as limited. Chinese domestic accelerator makers expect to achieve self-sufficiency in HBM3-class high-bandwidth memory (HBM) in about two years, and even locally, in-house output is failing to keep pace with surging demand.
"Despite a record shareholder return, the stock is overreacting on concerns about macro uncertainty," said Kim Young-gun, an analyst at Mirae Asset Securities. "At the current price, the 12-month forward price-to-book ratio (PBR) and price-to-earnings ratio (PER) stand at 1.7 and 4.3, respectively, down to pre-AI-cycle levels."
