Investment highlights
We maintain BUY and our six-month-forward target price of KRW52,000 on Samsung Electronics (SSNLF, 1.3x 2019F BPS). Samsung posted 4Q18 revenue of KRW59.3tn and operating profit of KRW10.8tn. With DRAM and NAND bit growth of -17.9% and -8.2%, respectively, shipments were much lower than those of competitors. In our view, the cause of the shipment decline is the failure to settle the difference of opinion in price negotiations with public cloud providers given that Samsung provides both DIMMs and SSDs to data centers. As for operating profit, semiconductors posted KRW7.77tn, DP KRW0.98tn, IM