Korea Investment & Securities assessed on the 24th that a favorable market environment is being created for Samsung SDS, including cloud migration and the expansion of artificial intelligence (AI) investments. Korea Investment & Securities maintained its investment opinion of 'buy' for Samsung SDS and raised its target price from 180,000 won to 230,000 won. The closing price of Samsung SDS the previous day was 191,800 won.
Jeong Ho-yun, a researcher at Korea Investment & Securities, noted that cloud migration began last year, primarily among financial institutions and public organizations, and forecasted that the Ministry of the Interior and Safety and the Supreme Court will also increase their orders for cloud system construction in the future. Supported by this, he estimated that the revenue from Samsung SDS's cloud division will slightly exceed market expectations in the second quarter of this year (April to June).
Jeong explained that the increasing use of AI is also positively impacting the demand for graphic processing units (GPUs), which is rapidly growing. He said, 'Currently, all five data centers of Samsung SDS are experiencing high operating rates, and after installing GPUs in the Dongtan Data Center's west wing in the second half of this year, revenue is expected to grow further.'
Jeong identified the expansion of shareholder returns as a key investment factor. Samsung SDS plans to increase shareholder returns and investments to raise its return on equity (ROE) from the current level of around 8% to 12%.
Jeong said, 'As both the public and private sectors in Korea accelerate cloud migration, they will follow the global market trend of increasing GPU demand simultaneously,' adding that 'it is time to quickly adapt to the changing landscape.'