Samsung Electronics reached its highest price in 9 months. It appears that investors flocked to the idea that Samsung Electronics is undervalued.
Samsung Electronics shares were traded at 62,200 won in the KOSPI market at 9:32 a.m. on the 3rd. The stock price rose by 2.3% (1,400 won) compared to the previous day. The stock price even climbed to 62,700 won early in the session, setting a new high since the end of September last year.
Securities firms have lowered their earnings expectations for Samsung Electronics for the second quarter of the year (April to June). The significant delay in the supply of 5th generation high-bandwidth memory HBM (HBM3E) to Nvidia had a large impact. Furthermore, the continued losses in the foundry (semiconductor contract manufacturing) business and the tightening of the exchange rate due to the strengthening of the won against the U.S. dollar have also been unfavorable.
However, even considering this, there is a common opinion that Samsung Electronics is undervalued. The company’s stock price has remained below 1 times the 12-month forward price-to-book ratio (PBR · market capitalization ÷ net worth).
Goldman Sachs, a global investment bank, noted, "There is a higher possibility that Samsung Electronics' earnings for the second quarter of the year may fall below market expectations, which could have a negative impact on the short-term stock price, but investors are already reflecting this in the stock price," adding, "When considering the 12-month forward PBR, we believe there is greater upside potential in terms of risk-reward."
Analysts have suggested that if the National Assembly moves forward with amendments to the Commercial Act and continues to implement reductions in dividend income tax or reforms to inheritance tax, Samsung Electronics, which has a large amount of cash, could benefit.
Hong Kong-based Credit Lyonnais Securities Asia (CLSA) stated, "Samsung Electronics has a net cash of 94 trillion won and is also undervalued in terms of valuation, so we could expect stock buybacks or special dividends if tax reforms occur."