[Click eStock] "Samsung SDS Likely to Scale Up Infrastructure Expansion... Target Price Raised"

Hanwha Investment & Securities Raises Samsung SDS Target Price to 300,000 Won

On August 31, Hanwha Investment & Securities stated that the possibility of upward adjustment in infrastructure expansion plans for Samsung SDS is high. The firm raised its target price from 2.9 million won to 3 million won and maintained its ‘Buy’ investment rating.

Sohye Kim, a researcher at Hanwha Investment & Securities, said, “Even though Samsung SDS has already secured major clients, its infrastructure expansion plans are relatively smaller compared to other operators. We view this as being due more to a conservative investment strategy rather than a lack of demand. As additional customer demand is confirmed going forward, there is a high likelihood that further expansion plans will be undertaken.”

Samsung SDS has previously announced plans to increase its AI infrastructure from the current 110MW level to 230MW by 2029 and over 800MW by 2031. In addition to directly constructing data centers, it is simultaneously pursuing a CAPEX-type, equity investment-type, and design-build-operate (DBO)-type approach. Kim explained, “The DBO-type enables the company to secure construction and operation revenue without directly owning assets, thereby reducing capital burden.”

For the second half of the year, the utilization rate of Nvidia’s latest graphics processing unit (GPU), the B300, is expected to rise, and the expansion of public and financial sector sales is likely to restore profitability to last year's level. Samsung SDS already holds approximately 7 trillion won in cash-equivalent assets and has secured an additional 1.2 trillion won in new capital through collaboration with Kohlberg Kravis Roberts (KKR). Based on this, Hanwha Investment & Securities analyzed that, even if CAPEX increases in the short term, the risk of damage to the financial structure will be limited.

Kim further emphasized, “We expect second-half results to slightly exceed market expectations as GPU-as-a-Service (GPUaaS) utilization improves, and from next year onward, the launch of new data centers will drive a new phase of growth. Especially, as both direct-investment infrastructure and capital-efficient DBO models are pursued concurrently, there is a high likelihood this will translate into medium- to long-term revenue and profit growth.”

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