Samsung Electronics Seen Heading for 650,000 Won as Foreign Buying, Higher Targets Stir Retail Investors

Samsung Electronics Gains Momentum as Foreign Buying Extends Seven-Day Rally

Shares Reclaim 280,000 Won at the Close

Brokerages Also Raise Earnings Outlooks

Samsung Electronics, South Korea's market bellwether, extended its rally to seven straight trading days on foreign buying. The shares reclaimed the 280,000 won level on a closing basis for the first time in about a month. With foreign net buying concentrated over the past three sessions and brokerages lifting target prices in succession, the advance is drawing growing attention. Market participants cite a prolonged memory-chip cycle, easing concerns that the artificial intelligence trade has peaked, and the prospect of large-scale shareholder returns.

According to EpicAI, an AI-based investment information platform, Samsung Electronics closed at 286,500 won on September 23, up 3.62% from the previous session. The stock has finished higher for seven straight trading days since closing at 248,500 won on September 14. It has gained 15.3% over that period. It was the first close above 280,000 won since August 21, when it ended at 281,500 won.

Foreign investors led the rise. They were net sellers of Samsung Electronics for eight straight trading days from September 9 through September 18, but turned net buyers over the most recent three sessions. On September 23, foreigners bought a net 1.2827 trillion won ($925 million) of Samsung Electronics shares, the largest net purchase on the Kospi that day.

Until mid-September, foreign investors had been selling both Samsung Electronics and SK Hynix. Over the five trading days from September 9 through September 15, they sold a net 5.8539 trillion won ($4.22 billion) of Samsung Electronics and 4.3869 trillion won ($3.16 billion) of SK Hynix, for combined net sales of 10.2408 trillion won ($7.38 billion).

The pattern shifted on September 18, when foreigners bought 1.3272 trillion won ($957 million) of SK Hynix and sold 462 billion won ($333 million) of Samsung Electronics. The direction then reversed from September 21. Foreign investors bought a net 1.0715 trillion won ($773 million) of Samsung Electronics on September 21, while selling a net 812.1 billion won ($586 million) of SK Hynix. On September 22, they bought another 215.6 billion won ($155 million) of Samsung Electronics and sold 403.3 billion won ($291 million) of SK Hynix.

Major South Korean brokerages had been lowering Samsung Electronics target prices as the stock underperformed, but the recent shift has been toward upgrades. Among firms that have published reports since August 31, LS Securities set a target of 450,000 won, Mirae Asset Securities set 400,000 won, and Yuanta Securities raised its target to 630,000 won in a report released on September 23.

Other firms had already presented targets in the 600,000 won range, including Korea Investment & Securities at 650,000 won and KB Securities at 600,000 won. BNK Investment & Securities, however, cut its target to 270,000 won in a September 14 report.

The market has cited a prolonged supercycle in memory semiconductors, shareholder return measures including a third-quarter dividend, and fading concern over an AI peak as reasons for a stronger share-price outlook. The greater focus is on shareholder returns. With this year's operating profit forecast at around 400 trillion won ($288.4 billion), expectations are building that next year's earnings could surpass that level, fueling hopes for additional returns to shareholders.

Baek Gil-hyun, an analyst at Yuanta Securities, wrote that memory-chip price gains may slow somewhat, but supply-demand conditions are projected to remain tight through 2027 and 2028. The market is concerned that 2028 could mark a peak because of new capacity additions and noise surrounding high-bandwidth memory, or HBM. Even so, he said supply constraints may ease later than expected, given HBM's encroachment on commodity DRAM production capacity and rising demand for high-capacity memory as AI inference spreads.

He added that if the memory upcycle lasts longer, Samsung Electronics' free cash flow could expand structurally from past levels, making it possible that the company's 2027-2029 shareholder return policy will become more shareholder-friendly. Any share-price correction driven by peak-out concerns would be a buying opportunity from a medium- to long-term perspective, he added.

Samsung Electronics said on August 21 that it expects the remaining funds for shareholder returns this year to total 90 trillion won to 110 trillion won ($64.9 billion to $79.3 billion). In the third quarter, it plans to carry out cash dividends of around 30 trillion won ($21.6 billion), including its regular quarterly dividend. The company plans to finalize and announce the details at a board meeting next month. At a board meeting scheduled for late January next year, it plans to make a final decision on the size of the remaining shareholder returns and the specific implementation plan, and announce that separately. The market is also focused on whether the company will retire treasury shares and, if so, in what amount.

Kim Dong-won, head of research at KB Securities, said that if the remaining shareholder return funds from the latest three-year period are assumed at 110 trillion won ($79.3 billion), Samsung Electronics could pay total cash dividends of 70 trillion won ($50.4 billion), including 30 trillion won ($21.6 billion) in the third quarter and 40 trillion won ($28.8 billion) in the fourth quarter, while also buying back and retiring treasury shares worth 40 trillion won ($28.8 billion). He added that if separate taxation on dividend income is applied and the company meets a 25% payout-ratio requirement, cash dividends could expand to 70 trillion won.

He also said that in the next three-year shareholder return policy for 2027-2029, which has yet to be announced, the company could present a new return policy above the current 50% level based on free cash flow.

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