April 16, 2024

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[THE INVESTOR] Samsung SDS has posted solid first-quarter earnings but is still not attractive in terms of valuation, said DB Financial Investment on May 2, maintaining a “hold” recommendation while raising the target price to 220,000 won (US$204.73) from 200,000 won.

Its revenue in the period increased 9.6 percent on-year to 2.36 trillion won and operating profit by 23.7 percent to 181.8 billion won, said analyst Kwon Seong-ryul, pointing out that revenue from consulting and SI division has improved for the first time in five years.

Its logistics and BPO department has incurred operating loss from one-off costs, but will return to normal from the second quarter, forecast the analyst. 

The cloud and solution businesses are yet to contribute, while its previous cash cow logistics and BPO will have a hard time overcoming low-margins, said Kwon. 

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