Mismatch in SAMSUNG PER

Question

I'm new to the stocks world, and I'm trying to calculate Samsung Electronics PER by myself to get used to this calculations. To calculate the PER first I'm calculating the EPS from Samsung taking the data from the financials in Yahoo, search for SMSN.IL (Can't post link due to low karma)

Net Income: 39243791000000 krw (Korean Won) Shares: 6792669250

EPS: 39243791000000 /6792669250 = 5777 krw

The current price for SMSN.IL is 1308 USD which is 1672363 in krw

The PER then should be: 1672363 / 5777 = 289.48x

The problem I have is that Yahoo Finance is saying the PER is 11.69x vs 289.48x

Why there is such a difference from both calculations? What is it that I'm doing wrong?

Thank you very much in advance.

Answer 1

It looks like you just grabbed the wrong number for outstanding shares for the listing you were looking at.

From the Samsung listing information you linked:

Samsung Electronics' original shares are listed on the Korea Exchange (KRX). Our GDR common shares are listed on the London Stock Exchange (LSE) and our GDR preferred shares are listed on the Luxembourg Stock Exchange (LuxSE).

A Global Depositary Receipt (GDR) is basically a way to link the shares between two exchanges and it doesn't have to be 1:1. A GDR can represent many original shares.

So you'll see a different number of shares and share price when you look at SMSN.IL vs 005930.KS. One has currency in USD, one in KRW, the USD one is GDR's rather than original shares.

There there are 271.71M GDR's (shares). Plug that in and you'll get much closer to the 11.69 PE Ratio that Yahoo reports. I'm not sure how Yahoo handles exchange rates, but my guess would be that it's point in time when the earnings report was released, so if you looked up the exchange rate at the time of the last report you might match their figure exactly.

Market Cap is calculated using this number of shares, so you can do a quick sanity check by dividing reported market cap by share price.