With 331 trillion won (about $ 293 billion) market value, Samsung has become the highest market value of Asia. Since the end of 2015, Samsung shares have risen 60%, reaching a record high by the end of March this year. Analysts are optimistic about Samsung's growth prospects, because the high chip prices will continue at least until the end of this year, Galaxy S8 in this month's listing is expected in last year's Galaxy Note7 after the fire accident to promote the recovery of mobile business.
Long-term growth potential worries investors
But Samsung's share price growth is losing momentum, this month only increased by 3%. Some investors questioned Samsung's long-term growth potential and expressed doubts about whether Samsung could maintain its double-digit profit growth this year.
"People are still worried about whether Samsung will maintain this growth next year," said Park Jung-hoon, fund manager for HDC Asset Management. "There is no reason to sell Samsung shares first, but over time, The concerns will intensify. & Rdquo;
Thomson Reuters surveyed 16 analysts on average expected Samsung's operating profit next year will only grow 5.5%, less than 61% this year.
Samsung's profit growth has been the driving force of the development of the memory chip market. DRAM and NAND chip prices are surging in the context of vendors' efforts to meet the needs of mobile devices and data for higher-performance memory chips. Market research firm IHS expects the storage chip industry this year's revenue will rise 32% to a record $ 104 billion.
Chip market is difficult to maintain rapid growth
But analysts said the growth could not be sustained as industry expanded production capacity to ease supply bottlenecks. IHS expects next year's storage chip industry revenue will only grow 3% to $ 107 billion. The industry is also concerned that product manufacturers will produce pricing fatigue and maintain the current chip order for new products rather than add more. "Now the DRAM chip market is a bit like that," IHS analyst Mike & middot; Howard (Mike Howard) said earlier this month at a media briefing in Seoul.
At the same time, Samsung has missed the wave of the global chip industry wave of mergers and acquisitions. As Samsung management needs to deal with corruption caused by its corruption scandal, Samsung is unlikely to soon implement M & A transactions. Samsung's successor, Jay Y. Lee, was arrested in February because bribery charges are being tried. He denied any misconduct.
The vacuum in the Samsung leadership will reduce investor hopes for new short-term growth momentum through strategic initiatives. "We can basically determine Samsung's chip profit this year will be doubled. Investors will begin to study the Samsung chip profits in the next year to achieve the same growth rate, "Park Jung-hoon said, with the passage of time, we will see some analysts began to change their views. & Rdquo;
Of course, no investors or analysts expect Samsung shares to fall. Thomson Reuters data show that Samsung's current price-earnings ratio of 8.62 times lower than Apple's 14.61 times, Intel's 12.55 times.
Samsung plans to repurchase and write off the shares of 9.3 trillion won, which will help support the stock price, improve yields. Kim Hyun-su, fund manager at IBK Asset Management, said that in view of Samsung's likely record profits, the company may increase dividends or stock repurchases to further support stock prices.
Samsung said on Thursday that the Galaxy S8 bookings have exceeded the previous generation Galaxy S7, indicating that many consumers have not been affected by the Galaxy Note7 fire accident.