Samsung Electronics ADR Listing in US Emerges as Likely Option as 2026 Operating Profit Seen at $27.2 Billion

KB Securities said June 25 that Samsung Electronics is moving into a full-fledged valuation rerating phase as rising memory prices drive a sharp earnings recovery. The brokerage raised its target price to 550,000 won ($398) from 530,000 won and maintained its buy rating.

Kim Dong-won, head of research at KB Securities, said customer memory demand fulfillment stood at about 50% this month, pointing to worsening supply shortages. AI data-center operators are absorbing 70% of total memory shipments, leaving little room for a meaningful increase in supply.

Kim cited three factors behind the case for a valuation rerating. A US listing of American depositary receipts, or ADRs, stands out as a leading capital-policy option to expand access for global investors. Large-scale shareholder returns, including share buybacks and special dividends, are also coming into view.

The prospects for Samsung's foundry business have also improved, he added, as the likelihood of new orders from big tech companies including Google, Amazon and Meta has increased.

Kim also presented his earnings outlook. He projects Samsung Electronics will post operating profit of 37.5 trillion won ($27.2 billion) this year, up 761% from a year earlier, and 54.8 trillion won ($39.7 billion) next year.

He said memory prices in the second quarter are set to rise more than 50%, led by server DRAM and enterprise solid-state drives, or SSDs. That would drive second-quarter operating profit to 9 trillion won ($6.5 billion), up 19-fold from a year earlier.

Competition among cloud providers to secure memory capacity will likely intensify further in the second half, Kim said. He forecasts operating profit for the period at 22.8 trillion won ($16.5 billion), up 55% from a year earlier.

Kim said KB Securities found during recent meetings with overseas investors that interest in a US ADR listing for Samsung Electronics was far stronger than expected. Many foreign investors appeared to view such a listing as a powerful catalyst for the stock if it materializes.

KB Securities views a US ADR listing as a strong capital-policy option for broadening access for global investors and expects related discussions to increase over time, he said. Given Samsung Electronics' current undervaluation and supportive market conditions, the brokerage said a US ADR listing is difficult to dismiss.

Kang Kyung-ju, Hankyung.com reporter qurasoha@hankyung.com