Samsung Electronics Target Price Cut from 550,000 Won to 370,000 Won... Why Was It Lowered by 33% [Click e-Stock]

Mirae Asset Securities announced on July 30 that it has lowered its target price for Samsung Electronics by 33%, from 5.5 million won to 3.7 million won, reflecting concerns over the localization of photolithography equipment in China. The investment rating remains 'Buy'.

Kim Younggeon, a researcher at Mirae Asset Securities, stated in a report released on the same day, "Following the downward adjustment of the NAND flash contract price outlook, the issue of photolithography equipment localization in China has emerged." He added, "We have only lowered the target multiple, considering that the impact of China's issue on earnings forecasts through 2028 is expected to be limited."

Kim explained, "The average selling price (ASP) of Samsung Electronics' memory products is expected to continue its upward trend next year, but the pace of increase will be more moderate than this year." He continued, "During the interim period before quantitative confirmation of persistent growth, the execution of shareholder returns and the presentation of a new vision will become key factors in meeting investors' expectations."

He also projected that next year will mark the genuine beginning of substantial shareholder returns. "If 50% of the free cash flow (FCF) generated from 2024 to 2026 is allocated to shareholder returns, the estimated dividend yield for this year will reach between 6.7% and 9.3% for common shares, and between 9.3% and 13.0% for preferred shares," Kim said. "Even with conservative assumptions, the cumulative FCF for the next three years is expected to exceed 800 trillion won."

This content was produced with the assistance of AI translation services.