Samsung set to hold first investor day since 2005
South Korean technology firm Samsung is preparing to talk to investors and analysts for the first time since 2005, in what will be only the second such event in the company’s history.
The company, which currently sells more than a third of mobile phone handsets worldwide – making it a key rival to Apple – as well as producing around a third of the world’s memory chips, experienced a rare drop in investor confidence earlier this year. Uncertainty over strategy at the Seoul, London and Luxembourg-listed firm led to a drop in the Samsung share price, which fell by around a fifth between early June and mid-July, reports the New York Times, though the price has since rebounded.
‘In the past, [Samsung] thought it was enough just to have rising earnings,’ Byun Han-joon, an analyst at KB Investment and Securities in Seoul, told the paper. ‘Now it realizes it needs to be more investor-friendly.’
In a bid to address investor concerns, analysts and institutional investors are set to gather at the Shilla Seoul hotel tomorrow to hear presentations from the company’s CEO, CFO and ‘presidents from all major business divisions on Samsung Electronics’ corporate objectives and strategic priorities’.
‘It will be a great chance to give investors a better understanding of Samsung and to discuss its latest strategy and vision for 2020,’ says the firm in a statement, adding that it will continue to ‘look for ways to be more open to shareholders’.
Mark Newman, an analyst for Sanford C Bernstein in Hong Kong, predicts that Samsung’s cash pile will climb from $77 bn next year to $160 bn in 2017, reports the New York Times.
The percentage of net income paid out in dividends or stock buybacks fell to 5 percent in 2012 from 50 percent in 2004, Newman wrote in a note to investors reported by the paper. This has contributed both to Samsung’s lower share price in comparison to Apple – $484.60 compared with Apple’s $526.75 at the time of writing – as well as investor concerns over what the company intends to do with its cash.
‘The company needs to either return cash or convince investors of the next profit driver after memory [chips] – preferably both,’ Newman said.