---
endpoint: analytics
pattern: Technology
status: done
latency_ms: 195517
conversation_id: 4cdbbec6-3998-4f04-9063-32a0129dfcde
citations: 9
created: 2026-05-31 21:20:24Z
---

# How does Samsung Electronics’s valuation compare to peers, and what justifies its premium/discount?

## Samsung Electronics (005930 KS) — Valuation vs. Peers

### Headline framing
Samsung is best understood not as a single-multiple stock but as a **conglomerate sum-of-the-parts**, because its core EV is the blend of three structurally different sub-businesses (commodity memory, custom logic/foundry, and consumer/handsets) plus a sizeable listed-affiliate stub. CLSA's most recent published view (25 June 2025) maintains an **Outperform (O-PF) rating, Target ₩73,000 vs. spot ₩61,300 (+19.1% upside), Mcap US$262.9bn, 3M ADV US$633.9m** [5]. The headline question — premium or discount — has different answers depending on the metric used.

---

### 1. The cleanest peer-comparison metric: forward P/Book

At the stock-level (i.e., blended), Samsung trades at the **bottom of its decadal range and well below memory peers**:

| Samsung Electronics — 1-yr fwd PBR (10-yr history) | Value |
|---|---|
| Minimum | **0.8x** |
| Maximum | **2.1x** |
| 10-yr Average | **1.3x** |
| +1 sd | 1.5x |
| –1 sd | 1.0x |
| **Current (Apr-2025 snapshot)** | **~0.9x** |

Source: CLSA, Quantiwise [6][9].

By contrast, the pure-play memory comparison is striking. **SK Hynix's CLSA target of ₩350,000 is anchored on a 1.7x forward PB — explicitly "in line with its +2 standard-deviations above the 10-year average multiple of 1.2x since 2010"**, with management noting that Hynix has historically printed as high as **2.7x (2012), 1.9x (2014), and 2.0x (2024)** during HBM/up-cycle peaks [3]. The valuation table is mechanical:

| SK Hynix Target Math | New | Old |
|---|---|---|
| BVPS | 4Q26CL ₩202,531 | 2Q26CL ₩168,923 |
| Target multiple | **1.7x BVPS** | 1.7x BVPS |
| Target price | **₩350,000** | ₩290,000 |

Source: SK Hynix, CLSA [2].

So on a clean PB basis, **Samsung at ~0.9x is trading at roughly half the implied target multiple of SK Hynix (1.7x), and below its own 10-year mean of 1.3x**. That is the headline "discount" investors usually point to.

---

### 2. Why a single-multiple comp is misleading — Samsung's SOTP

CLSA explicitly does **not** apply one multiple to Samsung. Instead each operating segment is benchmarked to its own listed peer set, and listed/unlisted affiliates are then added back at a discount. This is critical for interpreting the premium/discount question — Samsung receives **different valuations for different parts of the business**, some at premiums, some at deep discounts [1]:

| Segment | Peer benchmark | Multiple applied vs. peer |
|---|---|---|
| DS Memory (DRAM/NAND/HBM) | **Average of SK Hynix + Micron** | 100% of peer EV/EBITDA |
| DS S-LSI / Foundry | **TSMC** | **50% discount** |
| DX Mobile (smartphone) | **Apple** | **50% discount** |
| DX Network | Average of Nokia + Ericsson | 100% of peer |
| Display (Samsung Display, 70% global OLED share) | Average of LG Display + AUO | **20% premium** |
| VD / DA (TVs / appliances) | Average of Panasonic, Whirlpool, LGE | **10% premium** |
| Harman | Average of Mando + Hyundai Mobis | 10% premium |
| Listed/Unlisted affiliates | Market value / book value | **30% discount** |

Source: CLSA SOTP methodology [1].

The 25-June-2025 SOTP build (translated into ₩73,000 / share target) breaks out as follows on 2025 EBITDA [4]:

| (₩bn) | 2025 OP | 2025 EBITDA | EV/EBITDA | EV |
|---|---|---|---|---|
| DS Memory | 24,180 | 44,793 | **3.6x** | 161,255 |
| DS S-LSI/Foundry | (6,234) | 3,415 | **3.8x** | 13,112 |
| DX-Smartphone | 10,021 | 11,556 | **10.5x** | 121,333 |
| DX-Network | 494 | 2,468 | **5.8x** | 14,189 |
| Display | 2,962 | 9,409 | **4.0x** | 37,802 |
| VD/DA | 922 | 1,799 | **5.0x** | 8,967 |
| Harman | 1,055 | 2,020 | **4.0x** | 8,077 |
| Others | 19 | 1,817 | 2.0x | 3,634 |
| **Core business EV (A)** | **33,419** | **77,276** |  | **368,370** |
| Non-operating investments after 30% discount (B) |  |  |  | 30,615 |
| Net cash (C, end-2024) |  |  |  | 93,990 |
| **Equity value (A+B+C)** |  |  |  | **492,974** |
| Per share (₩, rounded) |  |  |  | **73,000** |

Source: Quantiwise, Bloomberg, CLSA [4]; same shape as the 29-May-2025 build at ₩400tn EV / ₩73,000 per share [7].

---

### 3. What justifies the segment-level premiums vs. discounts

**Premiums (20% / 10%) — Display and Consumer Electronics**
- **Display gets +20% over LGD/AUO** because Samsung Display has a ~**70% global share of OLED panels and is "highly profitable"** — i.e., dominant share + structural profit gap vs. LCD-heavy peers warrants premium treatment [1].
- **VD/DA gets +10% over Whirlpool / Panasonic / LGE** reflecting Samsung's brand premium and category leadership in premium TVs.

**Discounts (50%) — Foundry and Smartphone**
- **S-LSI / Foundry at 50% discount to TSMC**: This is the single most consequential analytical judgment. TSMC trades on dominant-leader economics (sustained ~50%+ gross margins, near-monopoly on advanced nodes, no operating loss). Samsung Foundry, by contrast, **runs a meaningful operating loss in CLSA's 2025 model (-₩6,234bn OP)** [4]. Half-TSMC is a way of saying "Samsung Foundry deserves to be valued, but at a structural handicap because of yield issues, customer churn, and the loss of leading-edge logic clients."
- **Mobile at 50% discount to Apple**: Apple monetises an ecosystem (Services, App Store) on top of hardware. Samsung mobile is hardware-centric, lower-margin, with no comparable Services annuity — hence half-Apple's EV/EBITDA.

**Pure peer-blend (no premium/discount) — Memory and Network**
- Memory is benchmarked to the **simple average of Hynix and Micron** — CLSA is implicitly saying Samsung's memory franchise has earned neither a premium nor a discount vs. that two-name comp [1]. This is itself a notable statement, given Samsung historically traded *above* Micron on scale/balance sheet but is now lagging Hynix on HBM execution.

**Cross-holdings at 30% discount**
- Listed affiliates (Biologics, SDI, SDS, etc.) and unlisted assets are knocked down 30% as a holding-company discount.

---

### 4. So is Samsung at a "premium" or a "discount"?

It depends on the lens:

| Lens | Conclusion |
|---|---|
| Blended P/B vs. own 10-yr history | **Discount** — 0.9x vs. 1.3x avg, near the trough of the cycle [6][9] |
| Blended P/B vs. SK Hynix target (1.7x) | **Steep discount** — roughly half Hynix's target multiple [3][6] |
| Memory segment vs. Hynix/Micron | **Parity** (50/50 blend, no premium or discount) [1] |
| Foundry segment vs. TSMC | **Built-in 50% discount** (structural — yield/customer issues) [1] |
| Mobile segment vs. Apple | **Built-in 50% discount** (no Services ecosystem) [1] |
| Display segment vs. LGD/AUO | **20% premium** (OLED dominance) [1] |
| Holdco stub vs. NAV | **30% discount** (standard Korean chaebol haircut) [1] |

The single best one-line answer: **Samsung trades at a discount at the headline level, but most of that discount is built mechanically into the SOTP via the Foundry (50% off TSMC), Mobile (50% off Apple), and holdco (30% off NAV) haircuts. The "unexplained" piece of the discount is the gap between current ~0.9x PB and CLSA's implied SOTP-equivalent fair value at ₩73,000 (+19% upside).** [5]

---

### 5. What would re-rate the stock

Implicit in the SOTP framework is a clear catalyst path:

- **Memory parity → Memory premium**: If Samsung closes the HBM gap with Hynix (HBM3E qualification at Nvidia, HBM4 leadership), the methodology would naturally shift the memory benchmark from the Hynix/Micron *average* to something Hynix-anchored. Note Hynix sends **70% of its HBM supply to Nvidia** today — the HBM market structure CLSA treats as the dominant story [8].
- **Foundry discount narrows**: Yield improvements on 3nm/2nm GAA and major customer wins (e.g., Qualcomm, Tesla AI6) would let CLSA narrow the 50% TSMC discount.
- **Holdco haircut compression**: Governance reform / chaebol value-up policies could compress the 30% NAV discount on cross-holdings.
- **Reversion to PB mean**: Even without segment-level catalysts, a simple cycle-driven move back to the 1.3x 10-year average PB from 0.9x today implies ~45% upside on multiple alone [6].

Conversely, the bear case is that Samsung's **discount is deserved** — Foundry losses persist, HBM share continues to leak to Hynix, and the holdco stub stays a perpetual drag.

---

**Sources**
[1] Korea Memory sector outlook (Micron call read across; solid AI demand) — CLSA (25 Jun 2025) — 607962817LinqAlpha.PDF
[2] Korea Memory sector outlook (Micron call read across; solid AI demand) — CLSA (25 Jun 2025) — 607962817LinqAlpha.PDF (SK Hynix valuation roll-forward table)
[3] Korea Memory sector outlook (Micron call read across; solid AI demand) — CLSA (25 Jun 2025) — 607962817LinqAlpha.PDF (Hynix PB anchor: 1.7x = +2sd above 10-yr avg 1.2x)
[4] Samsung Electronics – O-PF (Weak 2Q but valuation support) — CLSA (11 Jun 2025) — 607961798LinqAlpha.PDF (SEC SOTP table)
[5] Korea Memory sector outlook (Micron call read across; solid AI demand) — CLSA (25 Jun 2025) — 607962817LinqAlpha.PDF (Samsung rating/price/target snapshot)
[6] Samsung Electronics – O-PF (Optimistic amid 2H uncertainties) — CLSA (30 Apr 2025) — 607957658LinqAlpha.PDF (1-yr fwd PBR range)
[7] Samsung Electronics – O-PF (Treading carefully amid uncertainties) — CLSA (29 May 2025) — 607960821LinqAlpha.PDF (SOTP table)
[8] Korea Memory sector outlook (Micron call read across; solid AI demand) — CLSA (25 Jun 2025) — 607962817LinqAlpha.PDF (Hynix 70% HBM supply to Nvidia)
[9] Samsung Electronics – O-PF (Optimistic amid 2H uncertainties) — CLSA (30 Apr 2025) — 607957658LinqAlpha.PDF (PBR cycle peaks/troughs 2015-2025)

## Citations

- [1] **607962817LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/06/607962817LinqAlpha.PDF>
- [2] **607962817LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/06/607962817LinqAlpha.PDF>
- [3] **607962817LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/06/607962817LinqAlpha.PDF>
- [4] **607961798LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/06/607961798LinqAlpha.PDF>
- [5] **607962817LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/06/607962817LinqAlpha.PDF>
- [6] **607957658LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/04/607957658LinqAlpha.PDF>
- [7] **607960821LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607960821LinqAlpha.PDF>
- [8] **607962817LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/06/607962817LinqAlpha.PDF>
- [9] **607957658LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/04/607957658LinqAlpha.PDF>

