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| Officials from Samsung Electronics walk though a chip production facility in Pyeongtaek, Gyeonggi Province, in this file photo. Yonhap |
By Lee Min-hyung
Samsung Electronics shares are picking up renewed momentum after a rebound on foreign investors' stronger-than-expected buying sprees.
The return of foreign investors came in response to reviving hopes for Samsung to achieve an outstanding earnings rebound in the latter half of this year on semiconductor market recovery.
According to data from the Korea Exchange, Samsung Electronics shares jumped by 23.4 percent this year. The Samsung stock closed at 55,500 won ($41.76) on the first trading day of 2023, and has since experienced turbulent ups and down until the first quarter. But Samsung shares appear to show signs of a solid rebound in the second quarter, with its price closing at 68,400 won on Tuesday.
Other data showed that foreign investors' net-buying of Samsung shares reached an all-time high between Jan. 2 and May 22. They purchased Samsung shares worth 9.14 trillion won during the period, the largest since the exchange started compiling data in 1998. Of particular note was that more than 80 percent of those investors focused on purchasing Samsung shares out of all the buying in the benchmark KOSPI.
Market analysts are betting on an additional rally of the nation's most valuable firm by market capitalization, as chip market sentiment is set for recovery as early as the third quarter.
"Foreign investors will continue engaging in their buying spree of Samsung shares, as the chip industry will be able to improve its market condition in the second half following Samsung's decision to cut chip production," KB Securities analyst Kim Dong-won said. The brokerage house presented Samsung's target stock price at 85,000 won per share.
"There stands a high probability for Samsung Electronics to become a winner after the chip downcycle, as the company secures sufficient cash and chip production capability," he said. "Foreign investors' buying spree will continue for the time being, as Samsung is forecast to improve its earnings in the latter half."
Samsung Electronics reported a dismal earnings result with an operating profit of 640.2 billion won in the first quarter, down 95.5 percent from a year earlier, hit by the unfavorable semiconductor industry cycle.
Eugene Investment & Securities revised up Samsung's target stock price to 90,000 won per share from an earlier target of 82,000 won.
"The memory chip industry reached very closer to an inflection point," Lee Seung-woo, an analyst at the securities firm, said. "As the stock price movement precedes any changes of corporate earnings, chances are Samsung's earnings will soon pass the worst point in line with the latest stock rebound."
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