+ A

Samsung Electronics recovers fast

Jan 13,2020
The value of Samsung Electronics, the world’s largest memory chipmaker, rose almost $100 billion over the past year, taking it to No. 18 worldwide.

Samsung’s market capitalization reached $301.65 billion as of Thursday, up $95.08 billion from Jan. 2, 2019, according to the data compiled by Bloomberg.

Over the cited period, Samsung, also the world’s largest smartphone maker, rallied 51 percent to close at 58,600 won ($50.60) Thursday. On Friday, the company reached a fresh all-time high of 59,500 won.

Foreign investors have been scooping up Samsung shares, buying a net 627 billion won this month to Friday, betting that the tech firm’s earnings will improve down the road.

The median target price for Samsung was put at 67,900 won as of Friday.

In its earnings guidance last week, Samsung Electronics delivered estimate-beating fourth-quarter results on a slight recovery in chip prices, although it suffered its worst performance in four years in 2019 due to a prolonged slump in the chipmaking sector.

Samsung estimated its fourth-quarter operating income at 7.1 trillion won, down 34.26 percent from a year earlier, but the reading was well above the median market estimate of 6.5 trillion won, as chip prices bottomed out and its smartphones drew a better-than-expected market response.

The company expected fourth-quarter sales at 59 trillion won, down 0.5 percent on-year. The fourth-quarter sales estimate stood at 60.5 trillion won on average.

For all of 2019, Samsung predicted its operating profit at 27.71 trillion won, a 52.9 percent on-year drop and the lowest since 2015, when the comparable figure was 26.4 trillion won.

Full-year sales are expected to reach 229.52 trillion won, a 5.8 percent fall from 2018, Samsung said. It is the lowest level since 2016, when the comparable figure was 201.8 trillion won.

Samsung Electronics did not break down performances of its respective business divisions, saying it will announce the detailed earnings later this month.

Samsung has posted sluggish earnings since late 2018 due to a supply glut of chip products, following a two-year memory chip boom.

However, the tech firm is widely expected to see improved earnings this year on a recovery in chip prices and eased supply glut.

“The chipmaking business will lead an overall improvement in earnings,” said Kim Dong-won, an analyst at KB Securities. The analyst set the target price for Samsung at 70,000 won, up from the previous 63,000 won, expecting Samsung’s operating income to rise 50 percent to 41.4 trillion won for the year.

Samsung Electronics Chairman Lee Kun-hee saw the value of his holdings of Samsung Electronics stocks rise to 14.86 trillion won as of Friday, up 2.29 trillion won, or 18.29 percent, from the end of November. The bedridden shareholder holds a 4.18 percent stake in Samsung.

Over the cited period, Samsung Electronics surged 18.85 percent, driven by a foreign buying binge.

The country’s state pension fund, the National Pension Service, also enjoyed an 18.59 percent rise in the value of its Samsung shares over the cited period to 38.43 trillion won. The rise was in part because of the No. 1 institutional investor’s increased stake in the tech company.

Yonhap