Mirae Asset Maintains Samsung Electronics Target Price at 550,000 Won — "Full-Stack Internalisation Undervalued"

Mirae Asset Securities reaffirmed its "Buy" investment rating and target price of 550,000 won on Samsung Electronics (KRX: 005930) on the 15th. Based on the current share price of 322,500 won (as of 12th June), the implied upside is 70.5%.

Mirae Asset analyst Kim Young-geon stated: "Samsung Electronics' 2026 forecast (26F) price-to-book (P/B) and price-to-earnings (P/E) multiples stand at 2.9x and 6.6x respectively, well below the sector average of 7.6x and 12.4x. Given the company's full-stack memory manufacturing internalisation capabilities, the time has come for this valuation discount to be resolved."

DRAM and NAND Simultaneous Internalisation as Core Undervaluation Thesis

The report identifies Samsung's ability to internalise both DRAM and NAND manufacturing simultaneously as the primary basis for its undervaluation argument. In March, three NAND manufacturers — Kioxia, SanDisk, and Solidigm — along with networking equipment maker Cisco participated in a third-party rights offering by Nanya Technology worth 3 trillion won. Separately, Kioxia concluded a long-term supply agreement for DRAM used in solid-state drives (SSDs). The report attributes this to growing demand for stable procurement of DRAM components for SSD modules amid tightening DRAM supply conditions.

HBM Foundry Internalisation as a Differentiating Factor

In-house high-bandwidth memory (HBM) foundry capability was also highlighted as a key differentiator. Samsung Electronics has completed the internalisation of the HBM4 base die using its foundry division's 4nm FinFET process. This stands in contrast to global HBM competitors, which continue to apply DRAM processes to their base dies or rely on outsourcing to TSMC. According to analysis by TechInsights, the HBM4 base die accounts for approximately 15% of total production cost. As the technology advances towards HBM5, the strategic importance of base die procurement is expected to increase further.

Earnings Outlook: Steep Growth Trajectory

The earnings outlook points to sharply accelerating growth. Samsung Electronics' 2026 revenue is estimated at 732.386 trillion won, a year-on-year increase of 119.5%, while operating profit is forecast to surge 805.9% to 394.978 trillion won. For 2027, revenue is projected at 939.015 trillion won and operating profit at 528.833 trillion won.

By segment, the DS (semiconductor) division is expected to lead the recovery. The 26F DS segment revenue is forecast at 526.9 trillion won, up 304.9% year-on-year, with operating profit estimated at 382.9 trillion won. Within the DS division, DRAM revenue is projected at 368.4 trillion won and NAND at 127.9 trillion won.

Shareholder Returns in Focus

Shareholder returns also merit attention. The report estimates that, should Samsung implement a 50% free cash flow (FCF) shareholder return policy for 26F, the ordinary share dividend yield would range from 3.6% to 6.4%, and the preferred share dividend yield from 5.7% to 9.9%. Under a special dividend scenario, the ordinary share dividend per share (DPS) could reach as high as 20,500 won.

SOTP Valuation: Target Market Capitalisation of 3,667 Trillion Won

Based on a sum-of-the-parts (SOTP) valuation, the target market capitalisation is calculated at 3,667 trillion won. The DS division's enterprise value alone amounts to 3,211.7 trillion won, to which an equity value of 120.2 trillion won is added, net of 119.2 trillion won in net debt.

Conclusion

The report concludes: "Samsung Electronics has yet to escape the sector's lowest valuation, whether measured by P/E relative to operating profit growth or P/B relative to return on equity (ROE). The time has come to consider applying a premium — in the near term, for earnings growth, profitability, and shareholder returns; and over the medium-to-long term, for the company's full-stack memory manufacturing internalisation capabilities."