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The Korea Herald
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THE INVESTOR
March 29, 2024

Samsung

Samsung shares continue rally on upbeat forecasts

  • PUBLISHED :May 02, 2017 - 16:36
  • UPDATED :May 02, 2017 - 18:01
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[THE INVESTOR] Tech giant Samsung Electronics’ shares have been on a strong rally for the seventh consecutive day on May 2 thanks to momentum created by its planned cancellation of its own shares and the rosy outlook of investors.

Samsung’s share price reached a high of 2,275,000 won (US$2,009.8), up 1.97 percent, in early morning trade on May 2, reflecting optimism among investors over the firm’s businesses and shares. Its stocks hit an all-time high of 2,290,000 won on April 29. The shares closed at 2,245,000 won on May 2.


Related: 
Investment firms upbeat on Samsung Electronics

The company announced on April 27 that it would cancel its treasury stocks, worth nearly 40 trillion won, in two phases until 2018.

“The number of Samsung’s issued shares by the end of 2018 will drop by 10.4 percent, which could lead to a 10 percent increase in the earnings per share and asset value,” said Kim Dong-won, an analyst from KB Investment & Securities, forecasting the stock price could reach 2.7 million won down the road.

In the wake of the treasury stock cancelation plan, other local and global brokerages have raised their target prices to nearly 3 million won or higher.

The company’s decision not to set up a holding company, which garnered support from its large shareholders, also contributed to the stock rally, market analyst said.

Even Elliot Management, one of the largest Samsung shareholders who had demanded the Korean tech firm to establish a holding firm for better corporate structure, backed Samsung’s decision.

Some brokerages said Samsung has somehow eliminated troublesome corporate governance structure issues, which had undermined the stock value for a long time.

Market forecasts for Samsung’s flagship chip and smartphone businesses also indicated that the stock momentum would not slow down anytime soon.

Market research firm IC Insights said in its latest report that the Korean chipmaker will likely outpace US chip producer Intel, which has led the global chip market for the past two decades, by sales in the second quarter.

The market research firm anticipated that Samsung’s semiconductor business will earn US$14.9 billion revenue in the April-June period, compared with Intel’s US$14.4 billion.

Samsung’s Galaxy S8 and S8 Plus are also expected to post record sales in the coming months, surpassing the accumulative sales of 55 million units set by the Galaxy S7 and S7 Edge.

By Kim Young-won (wone0102@heraldcorp.com)

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