Samsung Electronics’ semiconductor business will continue to rally while earnings from display sector will improve, said IBK Investment and Securities on Sept. 20, maintaining a “buy” recommendation and 66,000 won (US$58.87) target price.
Its revenue in the third quarter will rise 14.6 percent from the previous quarter to 67.05 trillion won and operating profit by 16.1 percent to 17.27 trillion won. Operating profit from all sectors excluding IT and mobile will increase and display division in particular will show substantial improvement. The semiconductor industry will remain solid in the latter half, and DRAM price will slightly decline until the year-end but shipments will hike in the second half, growing over 20 percent for the whole year, said analyst Kim Un-ho.
Demand for servers remains strong despite market concerns and is rising enough to offset declining price. The display sector will gain significantly from recovering operation ratio of OLED, but mobile unit’s profitability will suffer from costs for new products. Prompted by rising operating profit from semiconductors, the electronic giant’s quarterly operating profit will maintain an upturn having bottomed out in the second quarter, and its stock price is relatively undervalued, added the analyst.