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Samsung

Published:27 January 2022 11:21 CET

Analyst:

Stephan Jöhri, CTO, stephan.joehri@adviscent.com, +41 1111111

Investment Case

Our assessment of Samsung Electronics using the Alpha Model shows that it is attractively valued for the majority of metrics relative to its peers (see figure 1). The company has a strong balance sheet, positive expected earnings and it has a good and improving QESG score, our proprietary assessment of a company’s ESG characteristics. In Q1 2020, Samsung Electronics reported a 5.6% increase in sales year-on-year and net profit declined by 3.2% to $4bn1.At the time, the company also forecast a decline in earnings quarter-on-quarter in Q2 amid expectations that the coronavirus pandemic will adversely impact demand for its core products. Nevertheless, it expects that demand for its memory chip business will remain solid as people continue to work from home. In addition, in May, the company announced plans to press ahead with investments in computer chip production – including the construction of an $8bn production line in South Korea and the continued expansion of a memory-chip factory in China – despite the uncertain backdrop.

Performance

Facts & Figures

General Information
ISIN	KR7005930003
Bloomberg Ticker	005930 KS
Price (HKD)	74,400
Market Cap (HKD m)	187,392,966.25
Free float (%)	79.19
Net debt	-104,435,462
Gearing	-37.85
ROE	10.58
Next reporting date	10.01.2022

Valuation	2024	2025	2026
P/E (HKD m)	-	-	-
EV/EBITDA (HKD m)	-	-	-
P/B (HKD m)	-	-	-
Dividend Yield (HKD m)	-	-	-

Financial Data	2024	2025	2026
Revenue (HKD m)	-	-	-
EBITDA (HKD m)	-	-	-
Net Profit (HKD m)	-	-	-
EPS (HKD)	-	-	-
Dividend (HKD m)	-	-	-

Peer Group Comparison

Company name	Market cap (HKD m)	P/E (Next 12 month) (HKD m)	EV/EBITDA (Next 12 month) (HKD m)	P/B (HKD m)	Dividend yield (HKD m)	EPS CAGR (3 years)	EBITDA margin	ROIC	Net debt/EBITDA
Samsung Electronics	187,392,966.25	-	-	-	-	-	28.01	10.24	-1.26
Apple	2,407,000	-	-	-	-	-	33.33	46.26	-0.45
Lenovo	80,045	-	-	-	-	-	-	-	-

Company details

Company Portrait

Samsung Electronics Co., Ltd. (Korean: 삼성전자; Hanja: 三星電子; RR: Samseong Jeonja; lit. "tristar electronics", sometimes shortened to SEC and stylized as SΛMSUNG) is a South Korean multinational electronics corporation headquartered in the Yeongtong District of Suwon.^[1] It is the pinnacle of the Samsung chaebol, accounting for 70% of the group's revenue in 2012.^[5] Samsung Electronics has played a key role in the group's corporate governance due to circular ownership.^[6] Samsung Electronics has assembly plants and sales networks in 74 countries and employs around 290,000 people.^[4] It is majority-owned by foreign investors.^[7]^[8] As of 2019, Samsung Electronics is the world's second-largest technology company by revenue, and its market capitalization stood at US$520.65 billion, the 12th largest in the world.^[9]

Samsung is a major manufacturer of electronic components such as lithium-ion batteries, semiconductors, image sensors, camera modules, and displays for clients such as Apple, Sony, HTC, and Nokia.^[10]^[11] It is the world's largest manufacturer of mobile phones and smartphones, starting with the original Samsung Solstice^[12] and later, the popularity of its Samsung Galaxy line of devices.^[13] The company is also a major vendor of tablet computers, particularly its Android-powered Samsung Galaxy Tab collection, and is regarded for developing the phablet market with the Samsung Galaxy Note family of devices.^[14] It has also developed 5G capable smartphones including the Galaxy S21 and foldable phones including the Galaxy Z Fold 3. Samsung has been the world's largest television manufacturer since 2006,^[15] and the world's largest manufacturer of mobile phones since 2011 when it surpassed Apple^[16] up until 2021. It is also the world's largest memory chip manufacturer^[17] and, from 2017 to 2018, had been the largest semiconductor company in the world, briefly dethroning Intel, the decades-long champion.^[18]

Business Segments

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Geographic Segments

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Sustainability Assessment

Single-use plastic accounts for an immense amount of waste in landfills. As part of Samsung’s Galaxy for the Planet initiative to deliver constant improvement in the sustainability of our mobile products, our design team is working to eliminate all single-use plastics from product packaging by 2025. After a decade of progress, only four percent of Samsung Galaxy smartphone packaging is still made from plastic. That’s a sharp decrease from the 51 percent plastic used in 2017 Galaxy packaging. Here’s how Samsung’s designers are promoting a more sustainable smartphone experience, starting with the box.