Samsung Electronics shares rebound as foreigners turn net buyers

Shares of Samsung Electronics Co., the largest stock on South Korea’s main bourse, rose strongly on Friday, snapping a five-day losing streak, as foreign investors returned on bargain hunting.

Samsung closed up 4%, its biggest daily percentage gain in nearly five months, at 67,400 won, outperforming the broader benchmark Kospi’s 1% rise.

The technology giant has fallen to fresh 52-week lows 10 times so far this month, weighed by the won’s weakness versus the dollar and concerns over the slowing local economy.

Foreign investors sold a net 3.53 trillion won ($2.8 billion) worth of Samsung Electronics shares between April 1 and April 28 with their combined stake in the company falling to 50.9%, the lowest since November 2016.

However, they returned as net buyers on Friday, purchasing 101 billion won in Samsung shares, according to the Korea Exchange.

“Foreigners moved to cover their short positions on Samsung, while local institutions were also seen to refill their portfolio with the tech company as the stock has fallen to close to the 60,000 won level,” said Alpha Investment Center director Jung Sung-han, who leads active stock management at Shinhan Asset.

“Samsung Electronics will likely stage a meaningful rebound in the second half when external uncertainties, including China’s lockdown and the war in Ukraine, are expected to ease.”

Song Myung-seop, an analyst at HI Investment & Securities, said Samsung’s near-term trough will be around 60,000 won, the stock’s record-low price-to-book ratio (PBR) of 1.2, where aggressive bargain-hunting is expected.

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Samsung’s shares have been depressed despite its strong business performance as investors questioned the tech giant’s outlook amid the top leadership vacuum.

Samsung, the world’s largest memory and smartphone maker, said on Thursday its first-quarter revenue increased 19% on-year to an all-time high of 77.78 trillion won, driven by brisk sales of memory chips and smartphones.

Operating profit rose 50.5% from a year ago to 14.12 trillion won, the company’s second-best quarterly performance.

Local brokerages slashed their target price for Samsung Electronics despite the company’s stellar profit growth.

HI Investment has lowered its target price for Samsung to 82,000 won from 89,000 won previously. KB Securities has cut its price target to 85,000 won from 90,000 won.

“The demand for smartphones and PCs in China is dwindling, which is a concern for Samsung. A global economic slowdown will also hurt Samsung’s chip sales,” said KB Securities analyst Kim Dong-won.

Write to Sung-Mi Shim and Sul-Gi Lee at smshim@hankyung.com
In-Soo Nam edited this article.