Brokerage : iM Securities
Analyst : Euiyoung Ko
Investment Rating : Buy (Maintained)
Target Price : KRW 180,000 (Maintained)
Core Momentum : Expanding product mix toward automotive and server components alongside market share gains in high-value MLCCs and AI FC-BGA drives structural valuation decoupling from legacy IT cycles.
📊 1. [Valuation & Key Financial Metrics]
- Rating & Target Price: Buy (Maintained), 12-Month Target Price maintained at KRW 180,000
- Valuation Status: Trading at a trailing P/B of 1.15x, near the lower bound of historical ranges
- Annual Earnings Forecasts (K-IFRS Consolidated):
- 2024A: Revenue KRW 10.294 Trillion / Operating Profit KRW 735 Billion / Net Profit KRW 679 Billion
- 2025F: Revenue KRW 10.979 Trillion / Operating Profit KRW 826 Billion / Net Profit KRW 632 Billion
- 2026F: Revenue KRW 11.714 Trillion / Operating Profit KRW 1.024 Trillion / Net Profit KRW 809 Billion
- 2027F: Revenue KRW 12.417 Trillion / Operating Profit KRW 1.153 Trillion / Net Profit KRW 936 Billion
- Key Valuation Multiples (2024A → 2025F → 2026F → 2027F):
- PER: 14.1x → 16.5x → 12.9x → 11.2x
- PBR: 1.1x → 1.1x → 1.0x → 0.9x
- EV/EBITDA: 5.7x → 5.0x → 4.2x → 3.6x
- ROE: 8.2% → 6.9% → 8.2% → 8.8%
- EPS: KRW 8,752 → KRW 8,149 → KRW 10,431 → KRW 12,066
- BPS: KRW 113,261 → KRW 121,585 → KRW 131,873 → KRW 143,796
- 2Q25 Quarterly Earnings Forecast (Preview):
- Projected Revenue of KRW 2.7 Trillion (YoY +6%, QoQ Flat), Operating Profit of KRW 198.2 Billion (YoY -5%, OPM 7.2%).
- Operating profit was revised down by 10% due to steep KRW/USD exchange rate declines (estimated FX sensitivity is approximately KRW 4 Billion per quarter).
🚀 2. [Market Opportunities & Business Outlook]
- Structural Portfolio Shift (Expanding Server & Automotive Exposure):
- Combined revenue contribution from server and automotive segments: Projected to rise from 26% in 2024 to 30% in 2025 and 35% in 2026 (excluding mobile-heavy camera modules, this proportion is even higher).
- Revenue reliance on Samsung Electronics has decreased from 62% a decade ago to 29% currently, supporting price decoupling from legacy IT set trends.
- Component (MLCC) High Market Share & Mix Expansion:
- In 2025, automotive and industrial MLCCs are forecast to represent 27% and 19% of MLCC sales, respectively. Combined share is projected to match mobile/PC by 2026 and cross over in 2027.
- Automotive MLCC market share expanded from 8% in 2021 to 19% in 2024, securing the No. 2 global position behind Murata.
- Retains an oligopolistic market share of approximately 40% in server-use MLCCs (a segment projected to grow at a 2024–2030 CAGR of +20%+).
- Capacity utilization is estimated in the high-80% range in 2Q25 and expected to surpass 90% in 2H25.
- Package Substrate (FC-BGA) Upgrades & Client Diversification:
- Server share within FC-BGA revenue: Projected to rise from 13% in 2023 to 29% in 2024 and 37% in 2025, driven by customer server CPU share gains and CSP custom ASIC design trends.
- AI accelerator FC-BGA revenue recognition begins ramping in 2Q25, with potential to secure new global clients in 2026.
- Optics Solution & New Application Expansion:
- Automotive share within camera modules is expected to reach ~17%, positioned to capture mid-to-long-term demand from robotaxi commercialization and humanoid robotics.
📝 Editor’s Comment (Perspective)
The analyst views Samsung Electro-Mechanics not as a legacy component supplier burdened by consumer smartphone/PC uncertainties and near-term FX pressures, but as an advanced electronics hardware provider successfully diversifying its customer base and restructuring its earnings foundation around automotive and server applications. Greater importance is placed on expanding market share in high-margin automotive/server MLCCs and AI accelerator FC-BGA substrates, setting the stage for a structural valuation decoupling from traditional IT set demand cycles.
To verify whether this investment thesis materializes going forward, investors should monitor whether MLCC capacity utilization surpasses 90% in 2H25, whether the combined revenue share of automotive and industrial MLCCs matches consumer IT levels by 2026, and whether server applications reach 37% of FC-BGA revenue alongside new AI client onboarding in 2026. 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.
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