November 23, 2024

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[THE INVESTOR] Samsung Electronics’ shares soared to an all-time high of 1.64 million won ($1,481) Thursday on expectations of the better performance of the Korean electronics giant, not only in smartphones, but also in chips and display panels for the rest of the year.

It is a new record for the company based on closing price, since it recorded 1,576,000 won in 2013. The price was up 4.73 percent from the previous day. 

The market bellwether’s share price opened higher Thursday and touched 1,605,000 won at around 11:30 a.m., the highest since it was listed.

Foreign investors, including Macquarie and Credit Suisse, bought up the shares.

Samsung entered the 1.5 million won range several times in 2013 and 2015, but concerns about the company’s performances amid slowing global demand for new smartphones dragged down the share price.

Thanks to Samsung’s strong rally, the benchmark Kospi rose to 2,055.47 points.

Local securities firms are forecasting the company’s annual sales will surpass 200 trillion won with over 30 trillion won in operating profit.

According to recent data by FnGuide, the average forecast for Samsung Electronics’ annual operating profit stood at 30.5 trillion won. As the company announced surprising earnings in the first and second quarters, market analysts are raising their expectations.

“The stock rally will continue as the semiconductor and display units of Samsung Electronics are expected to fare well in the second half of the year,” said Lee Seung-woo, an analyst at IBK Investment & Securities. “The new Samsung Galaxy Note 7 unveiled earlier this month will also add to the rally.”

The analyst raised the target price from 1.73 million won to 1.8 million won.

“Samsung will continue operating profits of over 8 trillion won in the third and fourth quarters,” said Park Ki-bum, an analyst at BNK Securities. “The company’s annual earnings is estimated to jump 17.4 percent in 2016 compared to last year, and even more next year.”

Park raised his target price from 1.7 million won to 1.82 million won.

Some even bet on the stock price reaching 2 million won.

“Sales of the Galaxy Note 7, memory chips and OLED products would give Samsung an absolute competitive edge, making it possible to reach 2 million won,” said So Hyun-cheol, an analyst at Shinhan Investment Corp.

Expectations on the restructuring of the group’s financial units seem to have affected the stock price too.

Samsung Life Insurance reportedly decided to purchase the 9 percent treasury stocks owned by Samsung Fire & Marine Insurance at a board meeting scheduled to be held at 4 p.m. after the market close.

Samsung Life Insurance owns a 71.86 percent stake in Samsung Card as it bought in January all Card shares owned by the electronics unit.

The life insurance unit is buying shares of the group’s financial units to turn itself into a financial holding company, according to market insiders.

Samsung Life’s share price also rose with the electronics’ rally, hitting a new high of 109,500 won during the day. It closed at 108,000 won.

By Song Su-hyun/The Korea Herald (song@heraldcorp.com)