Brokerage : DS Investment & Securities
Analyst : Daeho Cho, Jinyoung Kim
Investment Rating : BUY (Maintained)
Target Price : KRW 200,000 (Maintained)
Core Momentum : Qualitative business transformation driven by increasing demand for AI server/automotive MLCCs and full-scale supply of AI accelerator FC-BGA substrates amidst IT set demand recovery delays.
📊 1. [Valuation & Key Financial Metrics]
- Rating & Target Price: BUY (Maintained), Target Price of KRW 200,000 maintained
- Annual Earnings Forecasts (K-IFRS Consolidated):
- 2024A: Revenue KRW 10.294 Trillion / Operating Profit KRW 735 Billion / Net Profit (Controlling) KRW 679 Billion
- 2025F: Revenue KRW 11.037 Trillion / Operating Profit KRW 814 Billion / Net Profit (Controlling) KRW 555 Billion
- 2026F: Revenue KRW 11.775 Trillion / Operating Profit KRW 960 Billion / Net Profit (Controlling) KRW 685 Billion
- Key Valuation Multiples (2024A → 2025F → 2026F):
- PER: 13.7x → 19.7x → 15.9x
- PBR: 1.1x → 1.3x → 1.2x
- EV/EBITDA: 5.7x → 6.2x → 5.6x
- ROE: 8.2% → 6.2% → 7.3%
- EPS: KRW 9,022 → KRW 7,565 → KRW 9,352
- Quarterly Performance & Outlook:
- 2Q25 Review: Revenue KRW 2.785 Trillion (YoY +7.9%, QoQ +1.7%), Operating Profit KRW 213 Billion (YoY +2.4%, QoQ +6.2%, OPM 7.6%). Modestly beat the consensus (OP KRW 207.1 Billion) despite KRW appreciation.
- 3Q25 Preview: Projected Revenue of KRW 2.782 Trillion (YoY +7.1%), Operating Profit of KRW 240.7 Billion (YoY +3.9%, OPM 8.7%).
🚀 2. [Market Opportunities & Business Outlook]
- Component (MLCC) Structural Transition & Utilization Uptrend:
- Both revenue and profitability improved YoY driven by solid growth across AI servers, networking, and automotive MLCC demand.
- Component utilization rose by ~5%p QoQ to the low-90% range in 2Q25 and is projected to reach the mid-90% range in 3Q25 peak season.
- Inventory days remain healthy below 4 weeks; 2H25 CAPEX will focus on MLCC capacity expansion.
- Non-IT revenue share is projected to climb to the mid-40% level on broader ADAS adoption and expanding AI applications, fostering long-term simultaneous growth in Price (P) and Volume (Q).
- Package Substrate (FC-BGA) Full-Scale AI Accelerator Shipments:
- Full-scale supply of substrates for AI accelerators commenced in 2Q25. Driven by strong accelerator and GPU demand, FC-BGA is expected to account for over 50% of package division revenue.
- Annual FC-BGA revenue is expected to surpass KRW 1 Trillion, supported by stabilizing operations at the Vietnam manufacturing base.
- Package division 2025F revenue is estimated at KRW 2.200 Trillion (YoY +8.1%) with Operating Profit of KRW 140.2 Billion (YoY +0.8%, OPM 6.4%).
- 2025F Revenue Forecasts by Business Division:
- Component: KRW 5.110 Trillion (YoY +14.5%, 46.3% share)
- Optics & Communication Solution: KRW 3.727 Trillion (YoY -1.9%, 33.8% share)
- Package Solution: KRW 2.200 Trillion (YoY +8.1%, 19.9% share)
📝 Editor’s Comment (Perspective)
The analyst views Samsung Electro-Mechanics not merely as a passive component supplier bound by traditional consumer IT cycles, but as a critical electronic hardware enterprise undergoing qualitative structural upgrades toward high-value AI server and automotive components. Despite sluggish broader set demand and currency headwinds, greater weight is placed on portfolio diversification toward AI applications and simultaneous expansion in volume and pricing for high-capacity MLCCs.
To verify whether this investment thesis materializes going forward, investors should monitor whether component utilization reaches the mid-90% range with disciplined sub-4-week inventory in 3Q25, whether FC-BGA revenue achieves the projected KRW 1 Trillion annual milestone through stabilized Vietnam operations and AI accelerator shipments, and whether non-IT MLCC exposure successfully settles in the mid-40% range. These developments can be tracked through upcoming quarterly earnings releases, official IR materials, and 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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