"Samsung Electronics Expected to Post 100 Trillion Won in Third-Quarter Operating Profit on Memory Upcycle," Kyobo Securities Says

[Financial News] Kyobo Securities projected that Samsung Electronics will enter an era of 100 trillion won in quarterly operating profit in the third quarter. It maintained its target price at 500,000 won and its "Buy" rating.
Choi Bo-young, a researcher at Kyobo Securities, said on the sixth, "Samsung Electronics' consolidated revenue for the third quarter is projected to grow 138% year over year to 204.7 trillion won, while operating profit is expected to rise 763% to 105 trillion won. With an operating margin of 51.3%, the company is expected to enter an era of 100 trillion won in quarterly operating profit for the first time."
Operating profit for the Device Solutions Division is projected at 104.8 trillion won. The expansion of High Bandwidth Memory 4 (HBM4) sales and growing demand for high-capacity server memory are expected to drive earnings improvement. Meanwhile, HBM-focused capacity conversion is limiting the supply of commodity DRAM, supporting continued price strength.
By contrast, the DX Division is expected to remain in the red due to cost pressure from rising prices for key components, including memory. Operating losses for the MX and Networks business divisions and the VD/DA business divisions were estimated at 1.2 trillion won and 300 billion won, respectively.
Choi said, "Although overall DRAM production capacity is expanding, available supply of commodity DRAM remains limited because of HBM-focused capacity conversion. The share of capacity allocated to HBM is expected to rise from 27% in 2025 to 40% in 2027, so the shortage of commodity DRAM is expected to persist, along with firm pricing." 
Kyobo Securities also assessed that the expansion of HBM4 sales is gathering pace. Choi added, "HBM4 revenue in the third quarter is expected to increase more than threefold from the previous quarter, while HBM4's share of HBM revenue in the second half is projected to exceed 60%. Considering the product roadmap leading to HBM4E and subsequent products, as well as improvements in foundry yields, we believe Samsung Electronics' HBM competitiveness will continue to recover."
Kyobo Securities forecast Samsung Electronics' annual operating profit at 365.2 trillion won this year. It projected that the figure will rise to 520 trillion won in 2027 and 562.8 trillion won in 2028.

[email protected] Park Ji-yeon Reporter