Friday, June 14th, 2013
SEOUL, KOREA - The share price of Samsung Electronics has fallen below the level of 1.4 million won, with more than a 10-percent decline in four trading days. On June 11, Samsung Electronics' price closed at 1,389,000 won, the first time for the company shares to go below the 1.4-million-won mark since January 28.
This is largely due to gloomy forecasts on the company's flagship items including the Galaxy S4 and others, which triggered a flood of sell orders from foreign investors.
But an analyst commented that Samsung's share price is only a half of what it is worth given its net profit level. Kwak Hyun-soo, analyst with Shinhan Financial Investment, said on June 12, "Samsung Electronics' price doesn't make sense. Its closing price on June 11 is only 5.8 times of the profit-equity ratio based on this year's expected profit. Given the average profit-equity ratio of 9.7 since 2006, this is only half of the average."
"The so-called peak-out argument for Samsung is not a new story. It's been talked about for year but lately it was just widely circulated. Right now, it is foreign investors who create daily highs and lows. So we just wait and see how things will turn out."