Samsung SDS Emerges as a Beneficiary of the 'AI Infrastructure Era'... Samchully Targets Record Annual Profit on Improved Subsidiary Earnings [Stocktopia]

[Financial News] Here is a roundup of major brokerage reports as of the morning of June 11.
Samsung SDS has been viewed as a new beneficiary of the AI infrastructure era as its GPU as a Service (GPUaaS) business, which rents out graphics processing units, is gaining serious attention.
LS ELECTRIC is seeing rising earnings expectations as surging power demand from data centers rapidly boosts orders for switchboards and power infrastructure. Samchully, the country's largest city gas company, was also cited as an undervalued value stock expected to post record-high profit this year, supported by its stable city gas business and improved earnings from new businesses.
◆Samsung SDS (018260)― KB Securities / Researcher Kim Jun-seop
- Target price: 270,000 won (up 17.4% from 230,000 won) | Previous close: 225,000 won
- Investment opinion: Buy (maintained)
KB Securities raised its target price for Samsung SDS to 270,000 won, citing the long-term profitability of the GPUaaS business and growing market expectations for the AI infrastructure segment.
Researcher Kim Jun-seop said, "On the 8th, NAVER Corporation (NAVER) announced that it would run an AI Factory business in collaboration with NVIDIA, and that has also drawn attention to Samsung SDS's GPUaaS business," adding, "Samsung SDS has operated a GPUaaS-type business since 2021, and it recently began offering services using NVIDIA's flagship B300 model."
He added, "As the Gumi AI Data Center and the National AI Computing Center are expected to launch GPU-centered services, Samsung SDS plans to secure GPUaaS capacity of more than 200 megawatts (MW) in the long term."※Agentic AIThis is a step beyond conventional generative AI, which answers questions, in that it can set its own plan and carry out multiple tasks on its own when given a goal. Because it uses tools to complete work without constant human instruction, it requires far more GPUs and memory semiconductors for data processing and computation.※AI FactoryThis is a concept championed by NVIDIA, referring to a next-generation data center that integrates GPUs on a massive scale. Unlike traditional data centers that handle a wide range of tasks, it is likened to a factory because it continuously produces AI outputs.※GPU as a Service (GPUaaS)This is a business model that rents out expensive GPUs, which are essential for AI computing, via the cloud to companies and institutions that cannot easily afford them, and charges based on usage.
◆LS ELECTRIC (010120)― Yuanta Securities Korea / Researcher Son Hyun-jung
- Target price: 300,000 won (up 15.4% from 260,000 won) | Previous close: 236,000 won
- Investment opinion: Buy (maintained)
Yuanta Securities Korea raised its target price for LS ELECTRIC to 300,000 won, saying orders for data center power infrastructure and switchboards are likely to increase sharply.
Researcher Son Hyun-jung explained, "The key issue for the power equipment sector in the second half is how quickly new orders translate into upward revisions to earnings per share (EPS)." She added, "From that perspective, LS ELECTRIC, where demand is expanding simultaneously for data center connection segments, internal power infrastructure, and on-site power generation packages, is the company most likely to see the fastest upward revision in order guidance."
She also noted, "Medium-voltage (MV) switchboards account for about 80% of orders related to data centers and on-site power generation, and that is one of LS ELECTRIC's core product lines."※SwitchboardThis is a power distribution and control device that safely divides electricity coming from a power plant or substation and sends it where it is needed, while also cutting off power when abnormalities occur. Depending on voltage, it is divided into medium voltage (MV) and low voltage (LV), and it is an essential facility for data centers that consume large amounts of electricity.
◆Samchully (004690)― Hana Securities / Researcher Yoo Jae-seon
- Target price: 160,000 won (new) | Previous close: 117,100 won
- Investment opinion: Buy (new)
Hana Securities initiated coverage of Samchully with a Buy rating and a target price of 160,000 won, saying the company continues to generate solid cash flow as its core business stabilizes and subsidiary earnings improve.
In particular, Hana Securities highlighted improving earnings at subsidiaries such as the district heating and cooling business, Samchully Motors, and Sung Gyung Food, all supported by the company's energy business centered on city gas.
Researcher Yoo Jae-seon analyzed, "Even if profitability in the district heating and cooling business weakens in the second half, there is still a possibility of achieving record annual profit when considering the improvement in standalone earnings in the first quarter and the consolidation of Sung Gyung Food."
Samchully is also expanding through acquisitions backed by ample cash, including the purchase of a 100% stake in food company Sung Gyung Food in February this year.
Yoo said, "Samchully has a stable cash flow and financial structure, and there is no funding burden even as it continues to invest in new businesses," adding, "The low level of shareholder returns relative to its growing earnings is seen as a reason for its undervaluation."※District heating and cooling businessThis is a system that produces electricity and heat, such as heating and hot water, at the same time from combined heat and power plants or heat-only boilers, and supplies them in bulk to multiple users in residential, commercial, and industrial areas. It is an efficient and eco-friendly energy supply method that delivers heat through pipelines without requiring each household to install its own boiler, and it has become a key business for city gas companies because it uses energy more efficiently than individual boilers.

sms@fnnews.com Sung Min-seo Reporter