iM Securities raised its target price for Samsung SDS (stock code 018260) from 220,000 won to 270,000 won on July 6, representing a 22.7% increase, while maintaining a 'Buy' investment rating. Analyst Lee Sang-heon attributed the upgrade to accelerating revenue growth in the AI data center business as AI infrastructure expansion drives profitability improvements. The revision reflects Samsung SDS's transition into a full-scale growth phase for AI data center operations, which the analyst identified as the core driver of future corporate value appreciation. Samsung SDS operates five domestic data centers generating approximately 1.1 trillion won in annual revenue, with expansion plans targeting 10 trillion won in cumulative investments by 2031 across AI infrastructure, mergers and acquisitions, and AI platform development.
Samsung SDS Allocates 10 Trillion Won for AI Infrastructure by 2031
Samsung SDS plans to invest a total of 10 trillion won by 2031, broken down into 5 trillion won for AI infrastructure, 4 trillion won for new business ventures including mergers and acquisitions, and 1 trillion won for AX/AI services and AI platform solutions. The company will fund these investments using 1.2 trillion won from KKR investment capital, 6.6 trillion won in cash and cash-equivalent assets, and operating cash flows.
Dongtan Data Center Expansion Adds 600 Billion Won Annual Revenue
Samsung SDS currently operates five domestic data centers in Sangam, Suwon, Gumi, Chuncheon, and Dongtan, generating annual revenue of approximately 1.1 trillion won. The Dongtan data center completed a 20MW west building expansion in the first quarter of this year, which iM Securities projects will contribute an additional 600 billion won in annual revenue. This expansion supports increased demand for Samsung Cloud Platform (SCP) and the launch of GPU-as-a-Service (GPUaaS) subscription offerings.
Gumi AI Data Center Targets March 2029 Operation
The 60MW Gumi AI data center is scheduled to begin operations in March 2029 and is expected to generate over 1 trillion won in annual revenue. iM Securities also projects that the National AI Computing Center project will produce annual revenue exceeding 1 trillion won. Additionally, Samsung SDS aims to secure orders for over 500MW in data center DBO (Design-Build-Operate) projects by 2031, targeting 1 trillion won in annual revenue from this segment.
Data Center Revenue Projected at 6.6 Trillion Won by 2031
Analyst Lee Sang-heon stated that Samsung SDS's data center revenue will reach 6.6 trillion won by 2031, combining existing data center revenue of 1.6 trillion won with 2 trillion won from the Gumi AI data center, 2 trillion won from the National AI Computing Center, and 1 trillion won from DBO projects. Operating profit is projected to exceed 1 trillion won during the same period.
Target Price Calculated Using 23.5x Price-to-Earnings Ratio
The 270,000 won target price was derived by applying a price-to-earnings ratio (PER) of 23.5x to the estimated 2027-2028 average earnings per share (EPS) of 11,632 won. The PER multiple represents the recent two-year average PER with a 20% premium. Lee noted that valuation re-rating potential increases as the visibility of AI data center-driven growth improves.
FAQ
What target price did iM Securities set for Samsung SDS stocks on July 6?
iM Securities raised the target price for Samsung SDS (stock code 018260) from 220,000 won to 270,000 won on July 6, representing a 22.7% increase, while maintaining a 'Buy' investment rating.
How much revenue does Samsung SDS expect from the Gumi AI data center?
The 60MW Gumi AI data center, scheduled to begin operations in March 2029, is projected to generate over 1 trillion won in annual revenue according to iM Securities analyst Lee Sang-heon.
What is Samsung SDS's total investment plan for AI infrastructure by 2031?
Samsung SDS plans to invest 10 trillion won by 2031, allocated as 5 trillion won for AI infrastructure, 4 trillion won for mergers and acquisitions, and 1 trillion won for AX/AI services and AI platform solutions.
