Will Samsung Electronics stock reach the dream 100,000 won?

Samsung Electronics' stock price may reach 100,000 won following its positive first quarter earnings report and recovery in its chip business. But some skepticism remains.

Samsung Electronics' shares close at 85,000 won on April 2. [YONHAP]

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“I am a ninth-floor resident of Samsung Electronics. Will I be evacuated this time?”

“I hear rescue team below at the eighth floor. Will they come to evacuate me as well? I'm on the ninth floor.”

Posts like this are inundating online communities for individual stock traders in Korea as hopes surge that Samsung Electronics' stock price will soon hit 100,000 won ($74).

The commenters used “ninth floor” to refer to the prices at which they'd purchased their shares and “evacuation” as a metaphor indicating that they are finally ready to sell those shares without incurring losses after a long period of price deterioration.

Is it real this time?

Samsung Electronics' first quarter earnings surprise on April 5 drove up its stock prices, leaving Samsung Electronics shareholders with a more hopeful tone. The shares reached 86,000 won on April 8, their first time touching that point during trading since April 2021.

The tech giant forecast a 931 percent surge in profit to 6.6 trillion won, on the back of recovery in its chip business and continued success in smartphone sales. The figure surpassed the market consensus of 5.3 trillion won.

Its chip business is expected to log a profit of 1.5 trillion won after generating losses for five consecutive quarters.

Securities firms are reflecting the better-than-expected earnings in their target price of Samsung Electronics stocks.

Hanwha Investment & Securities raised its figure to 115,000 won from 94,000 won.

“A core element behind Samsung's consensus-beating earnings was the recovery of memory chips,” said Kim Kwang-jin, an analyst at Hanwha Investment & Securities.

“Not only DRAM [dynamic random access memory] chips, but also NAND chip profitability is expected to have improved.”

Shinyoung Securities also elevated its target stock price from 84,500 won to 100,000 won. Samsung Securities also raised its target from 95,000 won to 110,000 won.

“It will be an upcycle for at least one year,” said Hwang Min-sung, analyst at Samsung Securities.

“Turning to profit was largely expected but the increase in chip prices and reversal of inventory valuation losses, which are estimated at 1 trillion won, exceeded expectations.”

Nineteen out of 25 securities firms tracked by FnGuide have set their target stock price for Samsung Electronics at 100,000 won or above.

What does it symbolize? Reaching the 100,000 won mark is considered a dream come true for most of Samsung Electronics' individual shareholders in Korea.

Samsung Electronics shares are often seen as “national stock” due to the widespread belief that the tech behemoth, Korea's No. 1 company by market capitalization, won't ever go bankrupt. That belief has lead more than 5 million Korean investors to claim their shares of the tech company.

But ever since peaking at its all-time high 96,800 won in January, 2021, Samsung Electronics' share price has spiraled down, dipping as low as 60,000 won that same year. It dropped to 50,000 won level the following year.

Those who belatedly hopped on the Samsung ride, hopeful that its stock price would exceed 100,000 won, were trapped. They had to endure painful days while waiting the plunging stocks to recover. That time of agony has lasted more than three years.

“Reaching 100,000 won mark means Samsung Electronics' shareholders will be able to finally take profits from the long-term and painful investments,” said Kim Dae-jong, an economics professor at Sejong University.

“Taiwan, where TSMC is located, being impacted from the recent earthquake and the expected rate cut in the U.S. will benefit Samsung Electronics, leading it to really to reach 100,000 won.”

Others, still, hold more skeptical views.

“The most important factor to Samsung Electronics' stock price is whether its 12-layered HBM3E [high bandwidth memory 3E] chips are approved by Nvidia,” said Song Myung-sub, analyst at HI Investment & Securities.

“Whether it will succeed in approval is not known yet.”

Samsung Electronics has yet been approved of its HBM chips by Nvidia while its rival SK hynix has.

Song maintained the company's target stock price at 99,000 won.

BY JIN EUN-SOO [jin.eunsoo@joongang.co.kr]