[Click eStock] "Samsung SDS Expected to Secure More Data Centers... Target Price Raised"

"Will Benefit from Demand to Build Data Centers Outside the United States"

Hana Securities raised its target price for Samsung SDS (SDS) to KRW 290,000 from KRW 240,000 on November 9 and maintained its "Buy" rating.

"We are applying a premium to our previous valuation, reflecting the acceleration of the AX transition in Korea after 2027 and the possibility of securing additional AI data centers (DCs)," said Lee Junho, a researcher at Hana Securities.

Samsung SDS has begun construction of the Gumi AI Data Center and Korea AI CC, and has been selected as the preferred bidder for Pacific Asset Management's data center design, construction and operation (DBO) project, which involves capacity of more than 200 MW. The projects are expected to come online sequentially from 2029 and contribute to earnings. "Demand for AI data centers will increase significantly as Korean companies accelerate their AX transitions starting in the second half of 2026 and the RX market begins to take off in 2027," Lee said. "This will drive faster growth in Samsung SDS's cloud business."

Samsung SDS provides services across the entire spectrum, including data centers, cloud service providers (CSP), managed service providers (MSP) and software as a service (SaaS). It is also supporting the adoption of generative AI across its group companies. "As the FabriX platform allows us to address global demand for large language models (LLMs), we expect earnings to grow as GPU usage increases," Lee said. "Samsung SDS's strength is that it is expanding its data center capacity while effectively securing captive demand." He also forecast an annual revenue contribution of KRW 2.5 trillion based on global GPU prices.

However, Lee noted that "GPU-as-a-Service (GPUaaS) revenue will be fully recognized only once the Gumi data center begins operations in 2029." He added, "The factor that could increase upside potential at this point is securing additional AI data centers using the cash on hand. We believe the announced plans to secure AI data centers are conservative figures that exclude contracts with big tech companies, and we expect Samsung SDS to benefit from demand to build AI data centers outside the United States, including demand influenced by Bluewave."

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