"Even 140,000 won Is Cheap" Samsung Electronics’ Quarterly Operating Profit Expected to Top 26 Trillion Won... LG Seen Benefiting From Governance Reform [Jutopia]

[Financial News] On the morning of January 12, here is a summary of key reports from major securities firms.
Samsung Electronics Co., Ltd. is forecast to post 26.7 trillion won in operating profit in the first quarter, extending its earnings surprise on the back of strong memory prices. LG Group is expected to benefit from amendments to the Commercial Act of the Republic of Korea that strengthen the independence of the Audit Committee and introduce a cumulative voting system, thereby improving its governance structure. Although LG Energy Solution reported weak fourth-quarter results, the expansion of Energy Storage System (ESS) orders is projected to serve as a driver for a gradual rebound.
◆Samsung Electronics Co., Ltd. (005930)― Yuanta Securities Korea / Analyst Baik Gil-hyun
- Target price: Not provided
- Investment opinion: Not provided
Yuanta Securities Korea projected that Samsung Electronics Co., Ltd.’s operating profit in the first quarter of this year will reach 26.7 trillion won, allowing the company to continue its earnings surprise on the back of strong memory prices. Analyst Baik Gil-hyun estimated that the average selling price (ASP) of DRAM will rise 15% quarter-on-quarter, with shipment volume increasing by 1%. For NAND flash, he expects prices and shipments to climb by 20% and 7%, respectively. While the pace of shipment growth for DRAM is likely to be limited by process miniaturization, Baik noted that higher ASPs will drive earnings, adding that robust demand for high-capacity servers and restocking demand for consumer information and communication (IT) products will combine to sustain the current price upcycle.
◆LG Corp. (stock code 003550)― iM Securities / Analyst Sang Heon Lee
- Target price: 115,000 won (maintained)
- Investment opinion: Buy
iM Securities maintained its target price for LG Group at 115,000 won, saying that amendments to the Commercial Act of the Republic of Korea are expected to improve the group’s governance structure. Analyst Sang Heon Lee explained that the revision of directors’ fiduciary duty to shareholders is likely to ease concerns that conflicts of interest could arise among shareholders. As a result, he expects a narrowing of the discount applied to holding companies and a valuation re-rating, with holding firms such as LG Corp. emerging as key beneficiaries.※ Cumulative voting systemA system used when electing directors at a General Meeting of Shareholders that allows minority shareholders to concentrate their voting rights on a single candidate. For example, when three directors are to be elected, a shareholder holding 100 shares has 300 votes and may cast all of them for one candidate, giving small shareholders a better chance to elect their preferred director.※ Audit CommitteeA committee within the board of directors that audits a company’s accounting and business operations and serves to monitor and check abuses of power by controlling shareholders.
◆LG Energy Solution Ltd. (373220)― Hanwha Investment & Securities / Analyst Lee Yong-uk
- Target price: 500,000 won
- Investment opinion: Buy
Hanwha Investment & Securities set a target price of 500,000 won for LG Energy Solution, stating that despite weak fourth-quarter results, expanding ESS orders and expectations of higher market share in Europe will act as catalysts for a gradual rebound. Analyst Lee Yong-uk estimated that shipments to General Motors (GM) declined by about 2.5 gigawatt-hours (GWh). However, he pointed out that shipments of lithium iron phosphate (LFP) battery ESS increased by 1.5 GWh quarter-on-quarter, which in turn limited the decline in benefits from the Advanced Manufacturing Production Tax Credit (AMPC).

sms@fnnews.com Seong Min-seo Reporter