Brokerage : Mirae Asset Securities
Analyst : Junseo Park
Investment Rating : BUY (Maintained)
Target Price : KRW 180,000 (Lowered)
Core Momentum : Expanding product mix across AI server MLCCs and AI accelerator FC-BGA substrates accelerates a structural business transformation toward Non-IT high-value components despite legacy IT set sluggishness.
📊 1. [Valuation & Key Financial Metrics]
- Rating & Target Price: BUY (Maintained), Target Price lowered to KRW 180,000 (from KRW 200,000)
- Annual Earnings Forecasts (K-IFRS Consolidated, Net Profit for Controlling Interests):
- 2024A: Revenue KRW 10.294 Trillion / Operating Profit KRW 735 Billion / Net Profit KRW 679 Billion
- 2025F: Revenue KRW 11.245 Trillion / Operating Profit KRW 834 Billion / Net Profit KRW 663 Billion
- 2026F: Revenue KRW 12.017 Trillion / Operating Profit KRW 989 Billion / Net Profit KRW 865 Billion
- 2027F: Revenue KRW 13.122 Trillion / Operating Profit KRW 1.147 Trillion / Net Profit KRW 994 Billion
- Key Valuation Multiples (2024A → 2025F → 2026F → 2027F):
- PER: 14.1x → 16.2x → 12.4x → 10.8x
- PBR: 1.1x → 1.3x → 1.2x → 1.1x
- ROE: 8.2% → 7.4% → 9.1% → 9.8%
- EPS: KRW 8,752 → KRW 8,542 → KRW 11,142 → KRW 12,807
- Dividend Yield: 1.5% → 1.3% → 1.3% → 1.3%
- 2Q25 Quarterly Earnings Forecast (Preview):
- Projected Revenue of KRW 2.76 Trillion (YoY +7.1%) and Operating Profit of KRW 212.7 Billion (YoY +2.2%). While operating profit is adjusted 2.5% below consensus due to optics seasonality and FX declines, solid fundamentals defend against broader market concerns.
🚀 2. [Market Opportunities & Business Outlook]
- Structural Mix Shift Toward High-Value Non-IT (AI & Automotive):
- Steady business transformation underway despite sluggish traditional IT (mobile, PC) demand.
- Non-IT revenue share is projected to reach 40% of total revenue by 2027, while contributing over 50% of total operating profit.
- In MLCC, the Non-IT revenue proportion is expected to approach the size of the IT segment by 2026.
- Package Substrates Expanding in AI Accelerators & Custom ASICs:
- FC-BGA revenue is expected to surpass conventional BGA substrate revenue in 2025.
- Recognition of AI accelerator substrate revenue starting in 2Q25 is tracking ahead of initial profitability expectations.
- Expanding custom ASIC investments by major Cloud Service Providers (CSPs) is broadening demand beyond Client A. PC-centric FC-BGA is rapidly transitioning toward AI and network infrastructure.
- Additional customer onboarding is scheduled for 2H25, with multiple negotiations ongoing for 2026.
- Next-Generation Technology Milestones:
- Initiated operations of a glass substrate pilot line in May, advancing into the customer sampling phase.
- Increased shipment volumes of silicon capacitors serve as an additional catalyst for high-performance computing demand.
📝 Editor’s Comment (Perspective)
The analyst views Samsung Electro-Mechanics not as a legacy component supplier tethered to consumer mobile and PC demand cycles, but as an advanced electronics player successfully executing a qualitative transformation toward high-margin AI infrastructure and automotive hardware. Greater significance is attached to the structural expansion of Non-IT earnings—projected to generate over 50% of operating profit by 2027—and technological advances in glass substrates and silicon capacitors rather than short-term foreign exchange or seasonality headwinds.
To verify whether this investment thesis materializes going forward, investors should monitor whether FC-BGA substrate revenue officially overtakes BGA revenue in 2025, whether the company secures additional global CSP accounts for custom ASIC and AI accelerator substrates in 2H25, and whether customer sampling from the glass substrate pilot line and commercial shipments of silicon capacitors progress as planned. 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.
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