Brokerage : SK Securities
Analyst : Hyoungwou Park, Mingyu Kwon
Investment Rating : BUY (Maintained)
Target Price : KRW 187,000 (Maintained)
Core Momentum : Despite near-term FX pressures, rising MLCC capacity utilization driven by AI server and automotive demand, along with accelerated new businesses, underscores attractive structural valuation.
📊 1. [Valuation & Key Financial Metrics]
- Rating & Target Price: BUY (Maintained), Target Price maintained at KRW 187,000
- Valuation Status: Shares are trading near 20-year historical P/B lows, presenting strong valuation appeal considering the qualitative transition toward AI and automotive domains compared to the 2014–2016 smartphone peak-out cycle
- 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 10.928 Trillion / Operating Profit KRW 856 Billion / Net Profit (Controlling) KRW 592 Billion
- 2026F: Revenue KRW 11.656 Trillion / Operating Profit KRW 1.066 Trillion / Net Profit (Controlling) KRW 764 Billion
- 2027F: Revenue KRW 11.987 Trillion / Operating Profit KRW 1.224 Trillion / Net Profit (Controlling) KRW 881 Billion
- Key Valuation Multiples (2024A → 2025F → 2026F → 2027F):
- PER: 15.0x → 17.0x → 13.2x → 11.4x
- PBR: 1.1x → 1.1x → 1.0x → 0.9x
- EV/EBITDA: 5.9x → 5.5x → 4.6x → 4.0x
- ROE: 8.2% → 6.6% → 8.0% → 8.6%
- EPS: KRW 8,258 → KRW 7,630 → KRW 9,845 → KRW 11,355
- 2Q25 Quarterly Earnings Forecast (Update):
- Projected Operating Profit of KRW 203.7 Billion (YoY -4%, market consensus KRW 218.3 Billion).
- Adjusted for the decline in the KRW/USD exchange rate (1Q25 KRW 1,452 → 2Q25 KRW 1,408 average), with sensitivity estimated at KRW 1.0–1.5 Billion in monthly operating profit per KRW 10 FX move.
🚀 2. [Market Opportunities & Business Outlook]
- Component (MLCC) Utilization Uptrend & Operational Metrics:
- Despite sluggish legacy IT (PC, mobile) demand, solid demand from AI servers and automotive applications pushed 2Q25 MLCC utilization up to ~88% (vs. 85% in 1Q25).
- 2Q25 MLCC shipments are estimated to increase +2% QoQ, with ASP rising +1% QoQ. Utilization is expected to surpass 90% in 3Q25.
- Maintaining a technological lead in ultra-small, high-capacity, high-voltage, and high-reliability MLCCs with accelerated R&D investments.
- Autonomous Driving & Automotive Revenue Growth:
- Combined automotive and autonomous driving revenue (MLCC and camera modules) is projected to expand from KRW 1.6 Trillion in 2025 to KRW 1.8 Trillion in 2026.
- Progress in Next-Generation Growth Drivers:
- Silicon Capacitors: Supply chain established, with commercialization commencing in 2025.
- Glass Substrates: Addressing high process complexity and customer onboarding; positioned as a vital long-term thermal management solution for advanced semiconductor packages.
- Differentiated AI Component Positioning:
- Across MLCCs, cameras, and package substrates, the product lineup is deeply tied to AI infrastructure, providing relative earnings resilience against broader tariff and IT hardware market uncertainties.
📝 Editor’s Comment (Perspective)
The analyst views Samsung Electro-Mechanics not as a generic hardware maker constrained by short-term currency appreciation and delayed IT set recovery, but as an advanced electronic component supplier demonstrating fundamental resilience through high utilization rates in AI servers and automotive applications. Greater significance is attached to the company’s attractive valuation near 20-year P/B lows and the medium-term commercialization of next-generation growth drivers like silicon capacitors rather than temporary macroeconomic FX noise.
To verify whether this investment thesis materializes going forward, investors should monitor whether 2Q25 MLCC utilization reaches the estimated 88% level and surpasses 90% in 3Q25, whether combined automotive and autonomous driving revenue scales to KRW 1.6 Trillion in 2025 and KRW 1.8 Trillion in 2026, and whether commercial sales for silicon capacitors ramp up alongside measurable progress in glass substrate development. 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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