In today’s briefing:
- Regarding Next Monday’s SOL AI Semis TOP 2 Plus Rebalance
- How Much Ahead Does Samsung Electronics’ Share Price Look Forward Change in Operating Profit?
- Samsung Electronics (005930 KS): 3Q26 Prelim – ₩107T Clears a Lower Bar; the Selling Was Plumbing
- DTS IPO Valuation Analysis
Regarding Next Monday’s SOL AI Semis TOP 2 Plus Rebalance
- Jusung and Hanmi Semiconductor remain mcap Top 4, but weak momentum Z scores keep both low probability inclusion candidates for Monday’s 0167A0 rebalance.
- Samsung and Hynix stay Top 2; Samsung E-M, Square, Isu and Daeduck hold Top 4. TES stays, with Simmtech, Fadu and Hana Micron likely replacing PSK, VM and Wonik IPS.
- Simmtech is the strongest inclusion candidate, with ~KRW 200bn passive inflow, over 4% of float and ~1x recent DTV, making it a key name to watch Monday.
How Much Ahead Does Samsung Electronics’ Share Price Look Forward Change in Operating Profit?
- In this insight, I revisit the growth in the quarterly operating profit/operating margins of Samsung Electronics in the past 16 years and compare them against their actual share price performances.
- I remain moderately Bullish on Samsung Electronics since the first two pros (super cheap valuations and huge shareholder returns) outweighs the cons, in my view over the next 3-6 months.
- Certainly, we are not in the 2nd/3rd round of the super AI semiconductor cycle. We are probably closer to the 7th/8th inning. Nonetheless, time seems to be running out.
Samsung Electronics (005930 KS): 3Q26 Prelim – ₩107T Clears a Lower Bar; the Selling Was Plumbing
- 3Q26 prelim OP ₩107.4T (+20.0% QoQ): 0.7% below our ₩108.2T, 1–2% above a street bar that fell 7% since August. Revenue ₩195T is 2.6% light on the won.
- The 2.4% fall was plumbing: ETF rebalancing, options expiry and the end of the ₩15T buyback, which absorbed ~76% of September’s selling. Samsung fell less than the KOSPI.
- BULLISH, TP ₩400,000 held (+53%). At 3.9x consensus FY27E, the market doubts 2028, not 2027. January’s ₩55–75T could be five times the buyback that just ended.
DTS IPO Valuation Analysis
- My base case valuation of DTS is a target price of 29,360 won per share, which is 59% higher than the high end of the IPO price range (18,500 won).
- For my base case valuation, I used a P/E multiple of 12.3x based on my estimated net profit of 35.6 billion won in 2027.
- DTS designs and manufactures air-cooled heat exchangers used in power generation, LNG, and petrochemical plants. DTS is expanding into AI data centers and sustainable industrial waste-heat recovery systems.
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