Brokerage : Kiwoom Securities
Analyst : Sowon Kim
Investment Rating : BUY (Maintained)
Target Price : KRW 190,000 (Raised)
Core Momentum : Product mix enhancement driven by AI servers and automotive applications offsets consumer IT weakness, paving the way for a structural re-rating via 2026 AI accelerator client diversification and application expansion.
📊 1. [Valuation & Key Financial Metrics]
- Rating & Target Price: BUY (Maintained), Target Price raised to KRW 190,000
- Valuation Status: Shares are trading near historical lows at a 12-month forward P/B of 1.1x
- Annual Earnings Forecasts (K-IFRS Consolidated):
- 2024A: Revenue KRW 10.294 Trillion / Operating Profit KRW 735.0 Billion / Net Profit (Controlling) KRW 679.1 Billion
- 2025F: Revenue KRW 10.929 Trillion / Operating Profit KRW 804.0 Billion / Net Profit (Controlling) KRW 600.2 Billion
- 2026F: Revenue KRW 11.803 Trillion / Operating Profit KRW 964.4 Billion / Net Profit (Controlling) KRW 752.5 Billion
- Key Valuation Multiples (2024A → 2025F → 2026F):
- PER: 14.1x → 19.2x → 15.3x
- PBR: 1.09x → 1.21x → 1.10x
- EV/EBITDA: 6.0x → 5.7x → 5.0x
- ROE: 8.2% → 6.5% → 7.5%
- EPS: KRW 8,752 → KRW 7,735 → KRW 9,697
- Net Debt Ratio: -2.8% → -12.0% → -17.2%
- Quarterly Performance & Outlook:
- 2Q25 Review: Revenue KRW 2.785 Trillion (YoY +8%, QoQ +2%), Operating Profit KRW 213.0 Billion (YoY +1%, QoQ +6%), meeting market expectations (OP KRW 207.1 Billion).
- 3Q25 Preview: Projected Revenue of KRW 2.801 Trillion (YoY +7%, QoQ +1%), Operating Profit of KRW 238.0 Billion (YoY +6%, QoQ +12%).
🚀 2. [Market Opportunities & Business Outlook]
- Component (MLCC) Mix Optimization & Margin Expansion:
- 2Q25 industrial MLCC revenue surged by an estimated +44% QoQ (+31% YoY), driven by robust AI server and networking demand.
- Despite IT seasonality headwinds and FX depreciation, 2Q25 shipment volume (+3% QoQ) and blended ASP (+1% QoQ) increased concurrently, with utilization expanding to 90% (+4%p QoQ) alongside inventory reduction.
- 3Q25 utilization is expected to reach 95% (+5%p QoQ), with operating margin rising to 14.1%—reaching a 3-year peak supported by AI/automotive demand and seasonal IT demand.
- Package Substrate (FC-BGA) Expansion & Customer Diversification:
- Full-scale supply of AI accelerator FC-BGA substrates and network demand drove quarterly record revenue for the package substrate division in 2Q25.
- In 2025, FC-BGA sales across AI accelerators, networking, and servers are forecast to surge +78% YoY.
- In 2026, the company is poised to increase market share with existing AI accelerator clients and secure 2 or more new global accounts. Stable supply history with North American Client T positions the firm to benefit from upcoming AI5 and AI6 chip cycles.
- Optics & Communication Expansion into Robotics:
- While facing near-term seasonal softness and customer set adjustments, long-term growth is supported by expanding actuator supply into global humanoid robotics.
📝 Editor’s Comment (Perspective)
The analyst views Samsung Electro-Mechanics not merely as a traditional component supplier exposed to cyclical IT set demand, but as an advanced “AI-Driven” enterprise successfully defending profitability and building structural growth through portfolio transformation toward AI servers, networking, and automotive applications. Greater significance is attached to qualitative mix improvements and medium-term customer/application diversification into AI accelerators and robotics rather than near-term end-market fluctuations.
To verify whether this investment thesis materializes going forward, investors should monitor whether the component division achieves a 95% utilization rate and a 14.1% operating margin in 3Q25 to reach the projected 3-year margin peak, whether the FC-BGA division achieves +78% YoY growth in AI/server/network revenue in 2025 and secures two or more new AI accelerator customers in 2026, and whether actuator supply to the humanoid robotics sector materializes into commercial volumes. These developments can be tracked through upcoming quarterly earnings releases, official IR materials, and regulatory filings.
📢 Disclaimer & Source
Source: This content has been structured and newly written based on officially disclosed financial facts and data from brokerage reports.
Investment Risk Notice: This content is provided for informational and linguistic reference purposes only. Under no circumstances does it constitute financial advice or a recommendation to buy or sell any specific securities. All investment decisions and financial responsibilities rest entirely with the investor.
Contact: Compliance and Copyright Inquiries (ksb220805@gmail.com)
