Brokerage : iM Securities
Analyst : Eui-young Ko, Jung-ha Park (RA)
Investment Rating : Buy (Maintained)
Target Price : KRW 600,000 (Raised)
Core Momentum : Comprehensive valuation re-rating projected on the back of MLCC price hike scenario modeling driven by B2B data center demand, alongside synchronized upcycles in AI accelerator FC-BGA substrates
📊 1. [Valuation & Key Financial Metrics]
- Investment Rating & Target Price: Buy maintained; 12-month Target Price raised from KRW 350,000 to KRW 600,000 (Upside: 33.8% vs. closing price of KRW 448,500).
- Valuation Methodology: Applied a target P/B multiple of 4.1x (a 50% premium over the 2018 MLCC cycle peak P/B of 2.7x) to 12MF BPS, translating to an implied 2027F P/E of 26x.
- Annual Financial Projections (2026E – 2027E):
- 2026E: Revenue KRW 12.656 Trillion / Operating Profit KRW 1.383 Trillion (+2% upward revision, +5% vs. consensus) / Net Profit KRW 1.108 Trillion
- 2027E: Revenue KRW 14.412 Trillion / Operating Profit KRW 2.173 Trillion (+29% upward revision, +33% vs. consensus) / Net Profit KRW 1.754 Trillion
- Key Financial Indicators (2026E):
- EPS: KRW 14,282 / BPS: KRW 136,885
- P/E: 31.4x / P/B: 3.3x
- ROE: 11.0% (projected to reach 15.4% in 2027E, exceeding previous 2018 and 2021 cyclical peaks)
- EV/EBITDA: 13.8x / Dividend Yield: 0.6%
🚀 2. [Market Opportunities & Business Outlook]
- Key Drivers for High ROE & Earnings Sustainability:
- Demand driver has structurally pivoted to enterprise B2B data centers.
- Industry capacity for AI server-grade MLCC is concentrated among a scarce few suppliers including Samsung Electro-Mechanics.
- CapEx additions across the industry remain disciplined.
- MLCC Price Increase Sensitivity & Scenario Modeling:
- The analyst models a scenario where Murata executes price increases in 3Q26, followed by Samsung Electro-Mechanics in 4Q26.
- Under the base-case assumption of a conservative +10% price increase, 2027F operating profit is revised up by +29% to KRW 2.173 Trillion (KRW 2.2 Trillion in text).
- Under a +20% price hike scenario across 4Q26–1Q27, 2027F operating profit is projected to reach KRW 2.8 Trillion, substantially exceeding the market consensus of KRW 1.6 Trillion.
- FC-BGA Substrate Re-Rating:
- Global substrate peer multiples (P/E 35–45x) reflect product mix enrichment toward AI accelerators and customer binding.
- Unlike the 2021–2022 period when MLCC was in a downcycle while FC-BGA peaked, both divisions are now expanding in tandem driven by AI, unlocking full corporate valuation re-rating potential.
📝 Editor’s Comment (Perspective)
The analyst views Samsung Electro-Mechanics not merely as a conventional cyclical components maker vulnerable to consumer mobile volatility, but as a prime AI hardware platform beneficiary where both MLCC and FC-BGA divisions share synchronized, structural tailwinds driven by enterprise B2B data centers and disciplined industry capacity. The analytical thesis places greater strategic significance on the qualitative leap in earnings—projected 2027 ROE reaching 15.4% to exceed historical peak cycles—and the upside leverage unlocked by incorporating MLCC pricing upcycle scenarios.
To assess whether this investment thesis continues to materialize, key tracking points include the execution of Murata’s MLCC price hikes in 3Q26 and Samsung Electro-Mechanics’ subsequent pricing pass-through from 4Q26 onward, the realization of multiple expansion in the FC-BGA division via AI accelerator mix enrichment, and the progression toward achieving projected annual operating profit of KRW 2.173 Trillion by 2027. These developments can be verified through upcoming quarterly earnings releases, official company IR presentations, periodic regulatory filings (quarterly and annual reports), and DART disclosures.
📢 Disclaimer & Source
Source: This content has been structured and newly written based on officially disclosed financial facts and data from brokerage reports.
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