Samsung Electronics (005930.KS): Announces W2,450tn domestic investment by 2040; implied long-term growth rate reasonable

研报英文原文证据摘录

Samsung Electronics (005930.KS): Announces W2,450tn domestic investment by 2040; implied long-term growth rate reasonable

Goldman Sachs Samsung Electronics (005930.KS)

W125tn/W140tn/W151tn for 2026E/2027E/2028E, so from the outset it looks like

there could be meaningful upside to our estimates, especially considering today’s

announcement was just on domestic spending.

n Looking at SEC’s investment plan announced in 2022, the company mentioned that it

plans to spend 80% of its capex and R&D domestically.

n If we assume: 1) 80% of the company’s consolidated capex + R&D is for domestic

investment going forward, and 2) a 6% annual growth rate in the company’s capex

and R&D starting 2029 and until 2040, the cumulative domestic capex + R&D during

2026-2040 ends up being around W2,500tn, slightly higher than the announced

W2,450tn figure.

n In other words, under the assumption that our forecast for 2026E-2028E is correct,

today’s announcement by the company implies roughly a 5-6% growth rate in its

domestic capex + R&D for 2029-2040, which we believe to be not excessive and

within a reasonable range.

Price Target Risks and Methodology - Samsung Electronics

Valuation methodology: Our 12m 2026-2027E EV/EBITDA-based SOTP target price for

the common share is W480,000. Our 12-month target price for the preference share is

W360,000, which is based on our target pref to common shares discount of 25%,

derived from averaging: 1) the pref discount of the 2-factor model and 2) the average

preference share discount to common shares during the past 1 month. We are Buy rated

on both the common and preference shares.

Key downside risks: 1) major deterioration in memory supply/demand, 2) sharp

contraction in smartphone margins, and 3) mobile OLED market share loss.