Hana Securities Sees Samsung Electronics 2024 Operating Profit at $25.7 Billion, Calls Shares Deeply Undervalued

Hana Securities said on April 8 that Samsung Electronics Co. is projected to post 35.5 trillion won ($25.7 billion) in operating profit this year, up 711% from a year earlier. The brokerage maintained its buy rating and 300,000 won ($217) target price.

Kim Rok-ho, an analyst at the firm, said memory prices should remain firm in the second quarter. He assumes DRAM prices will rise 38% and NAND prices will increase 50%.

Big Tech-led server customers, along with mobile clients, are absorbing higher prices, Kim wrote. Companies are also pushing a strategy of using the rising-cost environment as an opportunity to expand market share.

He also cited signs of early moves to secure supply ahead of broader LPDDR adoption in AI systems from the second half, including in CPUs, DPUs and LPX. He said long-term supply contracts are also likely to leave some room for price increases, rather than capping upside as the market had feared.

Hana Securities expects Samsung Electronics' second-quarter operating profit to come close to 9 trillion won ($6.5 billion) and top 10 trillion won ($7.2 billion) in the third quarter.

Despite the outlook for quarterly operating profit above 10 trillion won, the stock remains in a deeply undervalued range on valuation metrics, Kim said. He added that long-term supply contracts could help reduce earnings volatility in memory.

Kim also said strong shareholder returns are expected on the back of ample free cash flow, even as the stock's performance remains difficult to explain. He maintained an overweight call on memory stocks and kept Samsung Electronics as his top pick.

Ko Jung-sam, Hankyung.com reporter jsk@hankyung.com