Yonhap News
Goldman Sachs has newly added Samsung Electronics (005930.KS) to its list of top picks for the Asia-Pacific (APAC) region. The move reflects the view that the memory chip market remains solid amid expanded investment in artificial intelligence (AI), while the recent stock price correction has enhanced the company’s valuation appeal.
According to the financial investment industry on the 3rd, Goldman Sachs added Samsung Electronics through its August regular revision of the “APAC Conviction List.” The APAC Conviction List is monthly research that includes the core recommended stocks Goldman Sachs considers most promising among listed companies in the region, including Korea, China, Japan, Hong Kong, India and Australia.
Goldman Sachs set a target price of 490,000 won for Samsung Electronics, with a 12-month upside potential of 87% and total return potential, including dividends, of 91%. The key rationale for the inclusion was cited as a structural improvement in the memory market. Backed by expanded investment in AI servers, memory demand is expected to significantly outpace supply, and the supply-demand gap is projected to widen further, with the imbalance persisting through 2028.
The outlook for memory profitability was also optimistic. Goldman Sachs forecast that Samsung Electronics’ DRAM operating margin would remain at around 80%, while its NAND flash operating margin would exceed 60%. The bank also cited as a positive factor that 60% to 70% of total planned production capacity is secured through long-term agreements (LTA). In addition, it analyzed that substantial advance payments and “floor price” clauses would provide considerable protection against downside risk even if the market slows.
The recent sharp correction in the stock price has also increased its price appeal, according to the assessment. Goldman Sachs said Samsung Electronics’ projected price-to-earnings ratio (PER) for 2027 has fallen to 3.1 times and its price-to-book ratio (PBR) to 1.2 times, sharply raising the risk-reward appeal. Although such valuations have effectively approached “downcycle” levels, earnings and profitability are expected to maintain a solid trend based on expanding AI memory demand.
With this revision, the number of Korean stocks on the APAC Conviction List rose to four, as Samsung Electronics was added to the existing KB Financial Group (105560.KS), Hyundai Mobis and S-Oil. S-Oil’s target price was raised to 156,000 won from 147,000 won, while the target prices for Hyundai Mobis and KB Financial Group were maintained at 710,000 won and 214,000 won, respectively.
Meanwhile, Japan’s Keyence, China’s BYD and Shengyi Technology, and the Hong Kong Exchange (HKEX) were also newly added in this revision. A securities industry official said, “As it is a flagship research product that includes the stocks Goldman Sachs recommends with the greatest confidence, it serves as an indicator that global institutional investors and active managers can reference when identifying investment ideas.”
