Nomura Raises Samsung Electronics Operating Profit Forecast to 774 Trillion Won

Nomura Securities' latest report indicates a significant upward revision of Samsung Electronics' operating profit forecast, expected to rise from the current approximately 391 trillion won to 635 trillion won, and further to 774 trillion won. Free cash flow is projected to increase from 296 trillion won to 456 trillion won, and then to 563 trillion won. The shareholder return yield is set to improve from 11.2% to 17.6%, ultimately reaching 22.3%. The operating profit and profit margins for DRAM and NAND are expected to continue to rise significantly over the next few years. This revision aligns with findings from Bank of America Merrill Lynch's research, which noted that Samsung Electronics has incorporated 60% to 70% of its memory sales into long-term supply agreements, with contract terms limiting declines and allowing for unlimited increases, thereby securing demand from major clients and retaining price upside flexibility. Against the backdrop of continued growth in AI capital expenditure and constrained memory production capacity, the strong price performance of DRAM and NAND translates into profit elasticity and cash flow returns for Samsung Electronics, with Nomura's forecast supporting this logic.

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