[Edaily Reporter Park Sun-Yeop ] Analysts have concluded that SamsungElectronics still has room for growth in the medium to long term, despite downward revisions to its second-quarter earnings expectations. While the profitability of its finished product divisions—such as smartphones and home appliances—may come under pressure due to the sharp rise in memory semiconductor prices, the assessment is that this earnings adjustment is unlikely to shift investment strategies, given that the majority of SamsungElectronics’ profits come from the memory business.

On the 29th, Noh Geun-chang, an analyst at HYUNDAI MOTOR SECURITIES, maintained a “Buy” rating and a target price of 440,000 won for SamsungElectronics(005930). Based on the closing price of 339,500 won on the 26th, this represents an upside potential of 29.6%. In the title of his report, Analyst Noh stated, “Entering a zone of turbulence does not mean the destination has changed.”

HYUNDAI MOTOR SECURITIES projected SamsungElectronics’ second-quarter revenue at 179.7 trillion won, in line with its previous estimate. However, it lowered its operating profit forecast to 81.3 trillion won, 12.2% below the previous projection. This is because provisions for performance-based bonuses—which were not reflected in the first quarter—are likely to be recognized all at once in the second quarter, and the profitability of the finished goods division is expected to be weaker than anticipated due to the sharp rise in memory semiconductor prices.
Consequently, HYUNDAI MOTOR SECURITIES also lowered its full-year operating profit forecast for SamsungElectronics by 3.9% from its previous estimate. However, the firm explained that the impact on full-year earnings would be limited. It assessed that the main factors are the timing difference in recognizing the provision for performance bonuses and adjustments to the profitability of the finished goods division (including MX), rather than any deterioration in the core memory semiconductor market conditions.
Analyst Noh stated, “97% of SamsungElectronics’ operating profit this year will come from memory semiconductors,” adding, “From an operating profit perspective, SamsungElectronics is similar to a pure-play memory semiconductor company.” He continued, “It does not appear necessary for the company to trade at a valuation discount compared to pure-play memory companies.”
He also maintained a positive outlook on the memory market. He explained that, given Micron’s earnings and guidance—which indicate that its operating margin has begun to exceed 80%—and Kioxia’s projected second-quarter operating margin of 74.3%, the memory bottleneck is leading to a sharp rise in profitability for related companies.
He predicted that it would take time for the supply shortage to be resolved. For DRAM, he forecast that the bottleneck would gradually ease starting in the second half of 2028, despite investments in new factories, due to various constraints. For NAND, he judged that while the side effects of rising chip prices are significant due to minimal new investment, the likelihood of prices falling is low.
The report also assessed that this cycle is likely to differ significantly from the 2018 cloud cycle. At that time, memory prices fell about a year after SamsungElectronics’ operating profit growth began to slow. However, the analysis suggests that a sharp price drop like the one seen in the past is unlikely to recur now, as long-term supply agreements (LTAs) have been strengthened.
Demand for artificial intelligence (AI) was also identified as a key variable. Despite concerns over the delay in OpenAI’s initial public offering (IPO), Analyst Noh projected that the share of enterprise revenue would rise to 50% by year-end. This suggests that as AI adoption expands beyond consumer services into the enterprise market, the foundation for memory demand could become even more solid.
Researcher Noh stated, “As the biggest beneficiary of the spread of Agentic AI, the ‘Buy & Hold’ strategy for SamsungElectronics remains valid.”