Highly-anticipated hike in profits puts Samsung shares step closer toward W100,000

The logo of Samsung Electronics is seen at a display booth operated by the company during Mobile World Congress 2024 in Barcelona, Spain, Feb. 24. Yonhap

Samsung Electronics is drawing attention in the stock market as it may surpass 100,000 won ($74.20) on the benchmark KOSPI, as it is likely to post its biggest first-quarter earnings in six quarters.

The world's biggest maker of memory chips and TVs is scheduled to announce its preliminary earnings for the January to March period on Friday, in the middle of a rebound in the global chip market after a severe downturn.

As a consequence, multiple securities firms forecast an operating profit that will be more than 5 trillion won in the first quarter, compared to 640 billion won a year earlier.

Hana Securities estimated operating profit will be 5.4 trillion won. SK Securities projected 5.6 trillion won, and Hyundai Motor Securities forecast 5.71 trillion won.

If realized, it would be the company's biggest operating profit since the third quarter of 2022.

Concerning first-quarter sales, financial market tracker FnGuide cited compiled data from brokerage houses and estimated the amount to be at 72.66 trillion won, up 14 percent from the previous year.

"Such a rosy picture is driven by memory chip prices that have rebounded following a downturn that began mid-2022 due to weak post-pandemic demand," Hana Securities analyst Kim Rok-ho said.

The stock market has already been buoyed by the positive forecast for Samsung Electronics, with its market capitalization exceeding 500 trillion won for the first time in three years on Tuesday, reaching 506.8 trillion won, although retreating to 502 trillion won Wednesday.

The market bellwether also saw its stock price rising above 80,000 won since March 28 when it closed at 80,000 won.

On Thursday, it closed at 85,300 won, up 1,200 won from the previous day's close.

Foreign investors were behind such a rise, as they bought more than 5 trillion won since March 19, according to the Korea Exchange.

The amount accounted for nearly 80 percent of the entire net purchases of KOSPI stocks made by offshore investors over the cited period.

"It wouldn't be a surprise for securities firms to set Samsung Electronics' price target higher," FnGuide said.

It pointed out that at least 10 brokerage houses — Daishin, Daol, DB, Eugene, Kiwoom, Korea, Meritz, Mirae Asset, NH and SK — raised the price target to over 100,000 won.

Market observers speculate Samsung Electronics' rally will be a plus factor for the entire KOSPI. Some observers say it could possibly reclaim the psychological threshold of the 3,000-point mark, up from the current 2,700 level.

The 3,000-point mark was only achieved during the pandemic era in 2021 when investors bought shares in hopes of an economic rebound from the pandemic.

Meanwhile, retail investors sold over 6 trillion won in Samsung Electronics shares since Mach 19, in an apparent move to redeem their investments following a downturn in the chip industry.

Many of them also hold shares in Naver and Kakao, but the two tech giants have been struggling on the KOSPI.