Tencent science and technology news according to foreign media reports, Samsung's stock price has continued to fall recently as concerns about the semiconductor super-cycle peaked. Although the company is expected to deliver its strongest third quarter performance in history this year, it does not seem to have any effect on its share price. And market experts also have mixed views on the company's future.
Some industry insiders say that the growth of Samsung Electronics will slow down after the completion of the semiconductor super cycle. Others argue that the company's share price will bottom out and rebound because all the negative factors have been reflected in its share price.
As of Monday, Samsung electronics shares closed at 43850 won on the Korean stock exchange, down 0.57 % from the previous trading day. In that day's session, the stock once fell to 43500 won, hitting a 52 - week low. Compared with the record high of 57519 won set on November 3 last year, Samsung electronics shares have fallen 24 % in less than a year.
Samsung Electronics is setting a new earnings record every year, but its price-to-earnings ratio has fallen from 12 times in 2016 to 6.2 times today as its share price falls. This is significantly lower than the South Korean composite index average of 10.7 times price-earnings ratio. In addition, the company's price-to-book ratio of 1.5 times, just above the liquidation value.
Despite Samsung electronics' record performance, its share price continues to fall. This means that in terms of valuation level, the company has become a value stock instead of south Korea's leading growth stock. Prior to the 50: 1 share split, Samsung electronics' share price rose to 3 million won last year when it was considered a real growth stock.
With stock prices lingering low, the market again invested Samsung Electronics as value stocks. That's because its share price is overvalued in comparison with the company's growth potential, although the industry has been expecting a record third-quarter operating profit of 17.3 trillion won ($15.41 billion).
However, foreign investment banks view Samsung Electronics from a different perspective. Morgan Stanley recently analyzed that considering the demand from the smartphone and server market is decreasing, and China plans to enter the NAND flash market next year, the semiconductor super cycle has ended. In other words, Samsung Electronics will have a hard time continuing to grow.
In response, South Korean insiders said the theory of "semiconductor super boom cycles" by foreign companies was overstated. This is largely because the semiconductor industry will continue to grow for quite a long time, because memory chips are the core elements of several industries that led the fourth industrial revolution. Such as artificial intelligence and self-driving automobile industry and so on. In addition, demand for semiconductors will continue to rise as cloud service providers speed up investment in memory computing, which requires more server DRAM chips. (translated / Hongyi)