Samsung Electronics' U.S. ADR Listing Seen as a Catalyst as Target Price Keeps Rising [Stock Spotlight]

[Financial News] KB Securities raised its target price for Samsung Electronics on the 25th from 530,000 won to 550,000 won. In addition to earnings improvement driven by surging memory prices, the brokerage said the potential listing of American Depositary Receipts (ADR) in the United States and a large-scale shareholder return policy are expected to trigger a full-scale revaluation.
Kim Dong-won, head of research at KB Securities, said, "As a sharp improvement in earnings driven by rising memory prices becomes visible, we expect Samsung Electronics to enter a full-fledged phase of valuation re-rating."
KB Securities cited several factors behind the revaluation, including the possibility of a U.S. ADR listing, expanded share buybacks and special dividends, and increased new foundry orders from big tech customers. At recent meetings with overseas investors, interest in a Samsung Electronics ADR listing was higher than expected, and if it becomes a reality, the firm said it could serve as a powerful catalyst for share-price gains.
The earnings outlook was also sharply raised. KB Securities estimated that operating profit will jump 761% from 43.6 trillion won this year to 375.3 trillion won next year, and expand further to 547.8 trillion won in 2027.
In particular, second-quarter operating profit is expected to rise 1,828% from a year earlier to 90.2 trillion won. The brokerage said the company is likely to post results that exceed market expectations as server DRAM and enterprise solid-state drive (SSD) prices climb by more than 50%.
KB Securities forecast that next year's operating profit in the Semiconductor (DS) division will rise to 363.7 trillion won, about 14 times this year's estimated 24.9 trillion won. It said higher average selling prices (ASP) for DRAM and NAND flash memory will drive profitability improvement.
Kim said, "At present, customers' memory demand fulfillment rate is only around 50%, and AI data center companies are absorbing 70% of total memory shipments." He added, "Since it is not easy to expand supply, competition to secure memory is likely to intensify in the second half as well."

dschoi@fnnews.com Choi Du-seon Reporter