Samsung planning more global deals
Samsung Electronics, Asia's biggest technology company by revenue, plans to seek more international deals and is considering boosting its dividend payout to investors.
The maker of Galaxy smartphones will be more aggressive in acquisitions after spending about US$1 billion investing in 14 companies since 2010, chief financial officer Lee Sang-hoon told a briefing in Seoul yesterday. Those deals include Sharp, Boxee and Novaled.
The world's biggest maker of smartphones, televisions and memory chips invited about 400 analysts and technology experts to its first briefing with top management since 2005 as it details a strategy for maintaining growth after overtaking Apple in smartphones. Samsung shares are headed for their first annual decline in five years amid concern a high-end phone market that is nearing saturation will curb growth even as sales of cheaper handsets increase.
"Samsung wants to communicate better with the market, the quarterly earnings announcement used to be the only channel that market observers and investors could use," Nam Dae-jong, an analyst at Hana Daetoo Securities in Seoul, said before the briefing. "The event should give a clearer outlook on the company in the longer term."
The company is considering a dividend payout of 1 per cent of its average stock price. Samsung currently trades with a dividend yield of 0.54 per cent, according to data compiled by Bloomberg.
Samsung shares fell by 2.29 per cent to close at 1,451,000 won yesterday in Seoul. The stock has dropped 2.9 per cent this year and lost US$26 billion of market value in June after analysts at JPMorgan Chase and Morgan Stanley lowered sales and profit estimates, citing slower shipments of its flagship Galaxy S4 smartphone.
Spending on research and development will rise to US$14 billion by the end of this year, compared with US$8 billion in 2010, Lee said yesterday.
The company has earmarked a record 24 trillion won (HK$171.59 billion) in capital expenditure this year and had spent about 63 per cent of the total as of September 30. The spending this year is larger than the market value of Sony.
The company is targeting annual sales of US$400 billion in 2020, said vice-chairman Kwon Oh-hyun.
Samsung last month posted record third-quarter earnings after extending its lead in the smartphone market and benefiting from a rally in chip prices.
Full-year net income is expected to rise to 31.4 trillion won, according to the average of 29 analyst estimates compiled by Bloomberg. Sales may rise to 232.1 trillion won, according to 41 analyst estimates.
The mobile unit, responsible for about two-thirds of earnings, posted record operating profit of 6.7 trillion won in the third quarter as the company tapped demand in China and India for mid-priced handsets.
Samsung this year added the S4, released the Galaxy Gear smartwatch, introduced the first phone with a curved screen and registered designs for spectacles to challenge Google's Glass in the wearable devices market. It sold about 120 million handsets in the third quarter, researcher Strategy Analytics said on October 29.