[Click e-Stock] "Samsung SDS Expected to Generate Mid- to Long-term Revenue... Target Price Raised"

Target Price Raised by 44,000 Won from Previous Level

On August 19, LS Securities raised its target price for Samsung SDS from 263,000 won to 307,000 won, while maintaining a 'Buy' investment rating.

Yujin Sun, analyst at LS Securities, stated, "In the medium to long term, Samsung SDS plans to convert its significant retained cash assets into revenue-generating businesses by sequentially executing projects for the construction of a national AICC and Gumi AIDC by 2028 to 2029. Reflecting improved IT service investment sentiment driven by the full-scale rollout of AX, we are changing our valuation method from DCF (discounted cash flow) to target PER (price-earnings ratio)."

Sun views Samsung SDS as taking a leading role in domestic AX. She noted, "Samsung SDS possesses a full-stack service portfolio covering every field, from AIDC infrastructure to cloud services, MSP, and AI solutions. Furthermore, through partnerships with global SaaS, CSP, and AI companies, Samsung SDS is well positioned to lead the spread of AX domestically." She added, "The partnership with AI-based cybersecurity company SentinelOne has enabled a diverse portfolio, including endpoint and ID security, making Samsung SDS a likely beneficiary as AX adoption expands."

Key areas to watch for the second half of the year include: ▲ Increased operational rate at the Dongtan DC West Wing ▲ Expansion of AI solution sales stemming from a groupwide shift to AI ▲ Proliferation of intelligent administrative platforms targeting the government.

First, Sun explained that about 25% of the total 20 MW power capacity at the Dongtan DC West Wing is currently generating GPUaaS revenue. On the remaining floor space, NVIDIA 'B300' and 'Vera Rubin' systems are expected to be deployed as part of the government initiative to strengthen GPU infrastructure. Sun commented, "For the B300 system, which can be operated directly, both setup and service launch are possible within this year, which will rapidly increase the operational rate and help improve profitability."

She also projected that group affiliates' and government AX projects will drive revenue. Sun said, "After solutions are implemented this year, the increase in usage will result in recurring revenue, and expect the positive momentum for affiliate and local government AX expansion to continue through 2027."

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