Brokerage : Hana Securities
Analyst : Rokho Kim, Minkyung Kim
Investment Rating : BUY (Maintained)
Target Price : KRW 200,000 (Maintained)
Core Momentum : Structural margin expansion driven by reduced consumer smartphone exposure, expanding AI server/automotive component mix, and full-scale 2Q shipments of AI accelerator FC-BGA substrates.
📊 1. [Valuation & Key Financial Metrics]
- Rating & Target Price: BUY (Maintained), 12-Month Target Price of KRW 200,000 maintained
- Valuation Status: Shares trade near the historical P/B band bottom at approximately 1.0x
- 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 11.223 Trillion / Operating Profit KRW 897.1 Billion (YoY +23%) / Net Profit KRW 683.9 Billion
- Key Valuation Multiples (2024A → 2025F):
- PER: 14.15x → 13.76x
- PBR: 1.08x → 0.99x
- EV/EBITDA: 5.87x → 5.25x
- ROE: 8.16% → 7.55%
- EPS: KRW 8,752 → KRW 8,814
- BPS: KRW 115,152 → KRW 122,211
- Quarterly Performance & Outlook:
- 1Q25 Review: Revenue KRW 2.739 Trillion (YoY +5%, QoQ +10%), Operating Profit KRW 200.5 Billion (YoY +11%, QoQ +74%), matching consensus and brokerage estimates.
- 2Q25 Preview: Projected Revenue of KRW 2.737 Trillion (YoY +6%, QoQ Flat), Operating Profit of KRW 215.5 Billion (YoY +4%, QoQ +8%).
🚀 2. [Market Opportunities & Business Outlook]
- Component (MLCC) Profitability & Mix Enhancement:
- 1Q25 sales achieved solid momentum supported by strategic customer flagship smartphone launches, China’s trade-in subsidies, and pre-tariff inventory pull-ins.
- Operating margin reached 11% in 1Q25, demonstrating resilient double-digit profitability backed by AI server and ADAS demand.
- 2Q25 blended ASP and profitability are projected to improve further alongside seasonal volume recovery and higher exposure to AI servers and automotive applications.
- Package Solution (FC-BGA/BGA) AI Accelerator Ramp:
- Following a soft 1Q25 due to PC FC-BGA contraction, both top-line and operating profit are projected to improve from 2Q25 as AI accelerator FC-BGA substrate shipments begin in earnest.
- BGA substrates maintain solid demand for ARM processors and memory chips.
- Optics & Communication Solutions:
- 1Q25 benefited from new flagship smartphone launches.
- 2Q25 division revenue is expected to decline 11% QoQ due to base effects, though expanding shipments of automotive camera modules for new customer vehicles provide partial offsets.
- Structural Transformation:
- Across all divisions, revenue exposure to AI servers and automotive applications continues to expand while smartphone IT dependence contracts, driving ongoing operating margin upgrades.
📝 Editor’s Comment (Perspective)
The analyst views Samsung Electro-Mechanics not as a cyclical supplier bound by consumer smartphone and PC demand fluctuations, but as an advanced electronic hardware enterprise structurally lifting its baseline profitability through expanding exposure to high-value AI server and automotive components. Greater weight is placed on qualitative end-market mix improvements—evidenced by MLCC operating margins returning to double digits (11%) and the 2Q25 commercial ramp-up of AI accelerator FC-BGA substrates—rather than near-term smartphone seasonality.
To verify whether this investment thesis materializes going forward, investors should monitor whether the component division sustains double-digit operating margins alongside blended ASP gains in 2Q25, whether AI accelerator FC-BGA shipments translate into meaningful top-line and margin recovery for the package division, and whether annual operating profit reaches the projected KRW 897.1 Billion (YoY +23%) to confirm multi-year structural transformation. These developments can be tracked through upcoming quarterly earnings releases, official IR presentations, 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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