20171219-三星证券-SEC_and_SK_Hynix_to_show_disparate_4Q_results_5页_293kb

报告摘要

Sector Update Summary

Core Content

This document provides a sector update for the semiconductor industry in South Korea, focusing on Samsung Electronics (SEC) and SK Hynix for the fourth quarter of 2017 (4Q17) and into the first quarter of 2018 (1Q18). It includes forecasts, target prices, and analysis of operating performance and market trends.

Main Points

4Q17 Forecast Highlights

Samsung Electronics is expected to report an operating profit of KRW15.9t, slightly below the previous estimate of KRW16.5t, due to won strengthening and special bonus payments, despite strong semiconductor prices.
SK Hynix is forecasted to achieve a record-high operating profit of KRW4.36t, up from KRW4.05t, driven by unexpectedly large chip price hikes and reduced cost burdens.

Factors Affecting Performance

Won appreciation is expected to reduce SEC's operating profit by over KRW400b in 4Q17.
Bonus payments to semiconductor staff and vendors are considered one-off expenses.
Semiconductor division earnings are likely to exceed forecasts due to strong chip prices.
Handset division earnings may fall short due to reduced subsidies in the US and China.

1Q18 Outlook

Both companies may face off-peak seasonality, but SEC could see slightly higher or stable operating profits if the Galaxy S9 is launched earlier than the S8 in 2017.
SK Hynix is expected to experience a decline in operating profit due to sluggish demand for iPhones and server storage.
Memory prices are showing a mild downtrend, especially for NAND, due to weak demand, while DRAM conditions remain positive.
SEC may shift some mobile production to server and commodity DRAM if needed, to maintain profitability.

Investment Ratings

Samsung Electronics is rated BUY with a 12-month target price of KRW3,100,000, indicating a 21.1% potential increase.
SK Hynix is rated HOLD with a target price of KRW90,000, suggesting a 16.6% potential increase.

Key Financial Data (in KRWb)

Segment	4Q17E	1Q18E	2017E	2018E
Sales	69,784	61,320	243,364	258,463
Semiconductors	21,189	20,894	75,395	84,986
DRAM	9,729	9,449	33,423	38,301
NAND	7,956	7,640	26,371	30,430
LSI	3,404	3,706	14,194	14,860
Displays	10,119	7,612	33,376	36,257
OLED	7,401	5,186	21,873	25,956
Telecom	28,467	26,986	109,668	110,195
Handsets	24,865	23,665	94,786	97,606
Consumer Electronics	15,558	12,828	52,188	57,025
Operating Profit	15,898	15,989	54,397	60,359

Operating Margin Trends

Segment	4Q17E	1Q18E	2017E	2018E
Operating Margin (%)	22.8	26.1	22.4	23.4

Key Insights

SEC is expected to outperform in 1Q18 due to the early release of the Galaxy S9, potentially offsetting seasonal weakness.
SK Hynix may see a decline in operating profit due to lower memory demand and price pressure.
DRAM is expected to maintain strong margins, while NAND margins are projected to decline.
Investors should monitor the flexibility of SEC's investment and supply plans for 2018 and any shifts in production focus.

Compliance and Disclaimer

The report is prepared without undue external influence and reflects the analyst's views.
Samsung Securities has a group affiliation with Samsung Electronics.
No individual investment advice is provided, and investors are advised to seek professional guidance.
All data is subject to change, and no guarantees of accuracy or completeness are made.
Target prices are for informational purposes only and not indicative of internal valuations.
The report is not intended for public distribution and is subject to regulatory restrictions in the US, UK, Singapore, and Korea.