April 17, 2024

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[THE INVESTOR] Samsung SDS’ IT service sector will improve and the company will grow on mergers and acquisitions, said Mirae Asset Daewoo on July 20, maintaining a “buy” recommendation and raising the target price to 240,000 won (US$212.99) from 200,000 won.

Demand for IT facilities will rise as companies prepare for the fourth industrial revolution and strengthen competitiveness. Revenue and operating profit of the sector this year will rise by approximately 10 percent and 30 percent, repectively, forecast analyst Jeong Dae-ro. Its BPO unit will grow further as it secures non-affiliate clients and diversifies its portfolio, added the analyst. 

Samsung SDS also will add further growth momentum, armed with 2.5 trillion won cashable assets, as it seeks to expand its business through mergers, noted Jeong. 

Its stock price has leapt more than 35 percent since April when Samsung Electronics announced its decision to retired its treasury stocks, clearing most uncertainties regarding group governance issues, and also on anticipations of continued earnings improvement, said the analyst.

By Hwang You-mee (glamazon@heraldcorp.com)