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Technology Stocks : Micron Only Forum -- Ignore unavailable to you. Want to Upgrade?

To: Jeff Leader who wrote (51045)	3/30/2000 1:08:00 AM
From: DJBEINO	Respond to of 53903

Asian Stk Focus: More Gains For Korea Samsung Elec Shrs SEOUL (Dow Jones)--The recent eye-popping surge in Samsung Electronics Co.'s (Q.SSE) shares has done nothing to cool the ardor of analysts, who believe the continuing recovery in memory-chip prices, among other factors, could push the stock still higher. In addition to rising prices for dynamic random access memory, or DRAM, chips, as well as the company's thriving businesses in mobile phone handsets and thin film transistor liquid crystal displays, or TFT-LCDs, the relative underperformance of the company's shares versus a key competitor and the potential business opportunities in China should fuel continued strong earnings growth for the company, analysts say. Samsung Electronics' shares, a darling of both foreign and local investors in the Korea Stock Exchange, have more than tripled since the end of June 1999. After correcting early in the year amid a sharp decline in DRAM chip prices, the company's shares have surged 60% since the end of February, due to a climb in the spot price of 64-megabit DRAM chips to above $5 after bottoming out at $4.56 on Feb. 25. Samsung Electronics' share price finished Wednesday up KRW31,500 to close at an all-time record high of KRW383,000 amid strong buying from foreign investors. Notwithstanding the possibility of a short-term correction following their recent surge, Samsung Electronics' shares "face only positive factors on the horizon," says Yoon Sung-whan, an analyst at Daiwa Securities SBCM in Seoul. Yoon has a buy rating on the stock and is maintaining a 52-week price target of KRW400,000, which he describes as conservative. Recovery In Chip Prices Although DRAM prices remain sharply off their highs November, expectations of a modest recovery during the second half of 2000 should lend a boost to Samsung Electronics' shares, says Jhin Yeong-hoon, an analyst at Daishin Securities Co. in Seoul. Jhin also has a buy recommendation on the shares and is maintaining a 52-week target price of KRW500,000. DRAM prices usually climb during the second half of each year because of increased demand from personal computer makers, Jhin says. Furthermore, global DRAM demand is expected to exceed supply from 2000 to 2002 as a result of sluggish capital investment by semiconductor makers during the last three years, he says. Also adding to the allure of Samsung Electronics' share price is that it looks attractive relative to that of Micron Technology Inc. (MU) of the U.S., one of its key competitors. Since the end of February, Samsung Electronics' shares have still managed to underperform those of Micron, which have more than doubled during the same period. In addition, the Korean chip giant's market capitalization lags that of Micron despite generating far higher profits from its semiconductor business. Micron's market capitalization is currently at around $37 billion while that of Samsung Electronics stands at around $45 billion, says Jeon Woo-jong, an analyst at Dongwon Securities Co. in Seoul. But he notes Samsung Electronics posted net profit of about $1.5 billion last year from its semiconductor business, compared with the net profit of around $480 million that Micron recorded between March 1999 and February this year. As a result, Jeon says he believes Samsung Electronics' shares are "extremely undervalued," adding that its market capitalization could eventually surge to three times that of Micron. The company's other businesses are also poised to perform strongly this year. Samsung Electronics should continue to remain the leading player in the global TFT-LCD market in terms of production capacity, Daishin's Jhin says. TFT-LCD sales should be strong thanks to robust demand among manufacturers of laptop computers and wall-hanging TVs, he says. Samsung Electronics should also post brisk sales of mobile phone handsets. Exports more than doubled last year to Europe and the U.S. Of Samsung Electronics' total sales, semiconductors account for about 25%, while telecommunication equipment command 25%, and TFT-LCDs 10%, with the remainder generated by its slow-growth home electronics division. According to a consensus of analysts polled by First Call Inc., Samsung Electronics should post net profit of KRW4.07 trillion in 2000, up 28% from KRW3.17 trillion last year.