Samsung is going to launch their newest flagship – the Galaxy S8 – soon, and is expected to be successful once more. However, Samsung investors seem to be worried about this, and with good reasons!
Samsung investors is worrying about success, why?
It is going to be a few weeks of only Samsung’s news again, with the launch of the Galaxy S8 and S8+ becoming imminent. After the Galaxy Note 7 explosions last year, the S8 duo is expected to bring glory again for the Korean giant, and from the looks of the phones, we can be hopeful for Samsung. That, plus the huge profit despite the Note 7 woe also made the near future of Samsung pretty much secured. However, Samsung investors do not seem to have the same mindset!
On the stock market, Samsung is kind of losing Steam recently. It has gone up just 3% so far in April, a significant slow down from previous times. Some Samsung investors are actually questioning the company’s long-term growth potential, and whether the company can achieve double digit profit growth next year is up for debate. As of now, Samsung is still Asia’s most valuable company, but its operating profit is expected to just be 5.5% next year, compared to this year’s projected 61%, according to a Thomson Reuters survey of 16 analysts.
The drive behind Samsung’s growth despite what happened to the Galaxy Note 7 was the exploding market of memory chip. Demand has been higher than ever, as phone manufacturers look to upgrade the power of their phones. However, this growth is not expected to repeat next year, as more production methods and technology becoming available to solve the bottleneck problem. This year, the market has seen a growth of 32% so far, but next year it is only expected to be just 3%. With that in mind, Samsung investors have the right to worry.
Samsung investors worrying: Is it too soon?
With that said, in recent years, Samsung has been one of the more innovating companies in the world. Hopefully the company will alleviate the investors’ worries by staying on the right track. For us now, let’s all wait until the Galaxy S8 is released!