Brokerage : Mirae Asset Securities
Analyst : Junseo Park (park.junseo@miraeasset.com)
Investment Rating : BUY (Maintained)
Target Price : KRW 2,800,000 (Raised)
Core Momentum : Application of 2029 forward valuation backed by sold-out substrate capacity and multi-year exclusive contracts, alongside structural ASP increases for substrates (+20%) and MLCCs (+10%) from 2027
📊 1. [Valuation & Key Financial Metrics]
- Rating & Target Price: BUY (Maintained) / Target Price KRW 2,800,000 (Raised by +115% from KRW 1,300,000) (Closing price KRW 2,127,000 as of May 29, 2026; upside potential 31.6%)
- Valuation Methodology: Shifted the valuation benchmark base from 2028 to 2029, applying a Target P/E multiple of 30x (historical up-cycle average) to 2029(E) EPS of KRW 93,242. This forward valuation is justified by multi-year exclusive agreements that secure long-term revenue visibility.
- Medium-Term Growth Projections (2026F–2030F): Revenue CAGR of +24.6%, Operating Profit CAGR of +61.3%
- Key Financial Metrics & Forecast:
- Revenue (KRW): 2024 KRW 10.294 Trillion → 2025 KRW 11.314 Trillion → 2026(E) KRW 13.520 Trillion → 2027(E) KRW 16.465 Trillion → 2028(E) KRW 22.238 Trillion
- Operating Profit (KRW): 2024 KRW 735.0 Billion → 2025 KRW 913.0 Billion → 2026(E) KRW 1.562 Trillion → 2027(E) KRW 3.408 Trillion → 2028(E) KRW 5.870 Trillion
- Operating Profit Margin (OPM): 2024 7.1% → 2025 8.1% → 2026(E) 11.6% → 2027(E) 20.7% → 2028(E) 26.4%
- Net Profit (Controlling) (KRW): 2024 KRW 679.0 Billion → 2025 KRW 706.0 Billion → 2026(E) KRW 1.313 Trillion → 2027(E) KRW 2.827 Trillion → 2028(E) 4.925 Trillion
- EPS (KRW): 2024 KRW 8,752 → 2025 KRW 9,099 → 2026(E) KRW 16,914 → 2027(E) KRW 36,428 → 2028(E) KRW 63,466
- Valuation Multiples (PER / PBR / ROE):
- 2024: PER 14.1x, PBR 1.1x, ROE 8.2%
- 2025: PER 28.0x, PBR 2.3x, ROE 7.7%
- 2026(E): PER 125.8x, PBR 17.0x, ROE 13.0%
- 2027(E): PER 58.4x, PBR 13.4x, ROE 23.5%
- 2028(E): PER 33.5x, PBR 12.6x, ROE 35.9%
- 2026 Annual Forecast vs. Consensus:
- 2026 Operating Profit estimated at KRW 1.562 Trillion (vs. consensus of KRW 1.589 Trillion)
🚀 2. [Market Opportunities & Business Outlook]
- AI Bottleneck Shift & Multi-Year Exclusive Contracts:
- Global hardware bottlenecks in AI infrastructure are rapidly expanding into substrates and MLCCs.
- Complete sell-out of substrate capacity has prompted an influx of customer prepayments, co-investment funding, and multi-year exclusive agreements, initiating a prolonged CAPEX expansion starting in 2026.
- High-visibility multi-year contracts provide even stronger valuation justification than the 2- to 3-year forward valuation precedents seen during past electric vehicle and battery up-cycles.
- ASP Increases & CAPEX Upgrades:
- Substrates (FC-BGA): Upward CAPEX revisions for AI server/network applications alongside a +20% ASP increase modeled from 2027.
- AI Capacitors (MLCC + Si-Cap): +10% blended MLCC ASP increase modeled for 2027, with server-grade MLCC price hikes outpacing commodity lines, further amplified by rapid demand expansion for silicon capacitors.
- Operational Supply-Demand Indicators:
- Global lead times for certain MLCC lines have lengthened from the typical 10 weeks to 20–24 weeks.
- Company inventory cycles have dropped to 4 weeks (below the typical 6-week baseline), driving aggressive client acceptance of LTAs and price hikes to secure preemptive allocation.
📝 Editor’s Comment (Perspective)
The analyst views Samsung Electro-Mechanics not merely as a passive component maker exposed to consumer tech fluctuations, but as an industry-leading hardware platform capturing long-term growth visibility through multi-year exclusive agreements across critical AI bottlenecks (FC-BGA and AI capacitors). This perspective justifies a structural valuation shift toward 2029(E) EPS (KRW 93,242 at 30x P/E), supported by substrate line sell-outs, client-backed co-investments, and a multi-year earnings CAGR (+61.3% in operating profit) that eclipses historical cycle peaks.
To evaluate whether this investment thesis unfolds as anticipated, key verification checkpoints include the formal disclosure of multi-year exclusive FC-BGA contracts with customer funding, the execution of modeled 2027 ASP increases (+20% for substrates and +10% for MLCCs), the persistence of tight 4-week inventory cycles alongside elongated lead times, and the pace of commercial revenue recognition from silicon capacitors. Progress on these fronts can be tracked via upcoming quarterly earnings announcements, investor relations presentations, and official regulatory filings.
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Source: This content has been structured and newly written based on officially disclosed financial facts and data from brokerage reports.
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