[THE INVESTOR] Samsung Electronics has postponed its transformation to a holding company system but investors should focus on its strong fundamentals, said KB Investment and Securities on March 27.
The securities firm maintained a “buy” recommendation and 2.7 million won (US$2,425) target price.
The governance structure change could boost the return on equity but there also are uncertainties, and attention should rather be on its heightened competitiveness, bolstered by the favorable market condition and improved earnings, said analyst Kim Dong-won.
Samsung Electronics’ shareholder return ratio was 4 percent in comparison to its 283 trillion won market value, and the tendency will be maintained this year, forecast the analyst. Its cash flow will hike 20 percent to 28.5 trillion won this year, while the return ratio will be 4 percent at the least, said Kim.
Its current stock price is 1.7 times its price-to-book ratio, lower than the average 1.8 of the global memory chip makers, added the analyst.
By Hwang You-mee (glamazon@heraldcorp.com)