1、 Disclosures&Disclaimer This report must be read with the disclosures and the analyst certifications in the Disclosure appendix,and with the Disclaimer,which forms part of it.Issuer of report:The Hongkong and Shanghai Banking Corporation Limited,Seoul Securities Branch View HSBC Global Investment Re

2、search at:https:/ The 20theditionof the EM Sentiment SurveyClick to viewHesitant bulls of summer Detailed 2Q results show better smartphone margins but worse memory performance Sharp recovery from 3Q due to memory price hike and more meaningful HBM3e supply as well as OLED peak season Maintain Buy w

3、ith an unchanged TP of KRW88k Weak 2Q due to one-offs.Due to inventory adjustment costs and some provisions and penalties,Samsungs 2Q performance was weak with OP of KRW4.7trn(-30%q-o-q,-55%y-o-y)with sales of KRW75trn(-6%q-o-q,flat y-o-y),see:2Q preliminaries memory margins hit by one-offs,9 July).

4、However,DRAM and NAND bit shipments were better at+12%q-o-q and+27%q-o-q(vs.HSBCe of+8%,+13%),respectively;due to surging orders at Chinese PC and smartphone makers for legacy products as well as+30%q-o-q bit shipment growth for high-bandwidth memory(HBM),which accounted of 15%of DRAM sales in 2Q(fr

5、om 12%in 1Q).Smartphone margins hovered higher at 11%due to longer-tailed flagship smartphone sales as well as lower marketing costs.Sharp rebound in 3Q and beyond:We see a+102%q-o-q memory-driven earnings improvement in 3Q,at KRW9.5trn(+3%y-o-y),with sales of KRW82trn(+10%q-o-q,+3%y-o-y)on:1)sequen

6、tial memory price increases of 7%for DRAM and 8%for NAND on the back of surging legacy demand as well as smartphone content growth for AI,from peak season demand at 2)smartphone and tablet OLED.We assume 3)a long-delayed HBM3e supply to major GPU and application-specific integrated circuit(ASIC)cust