Brokerage : Daishin Securities
Analyst : Kangho Park
Investment Rating : BUY (Maintained)
Target Price : KRW 180,000 (Maintained)
Core Momentum : Expanding automotive MLCC shipments to Chinese EV makers and increasing AI exposure in FC-BGA reduce earnings volatility and drive qualitative structural upgrades.
📊 1. [Valuation & Key Financial Metrics]
- Rating & Target Price: BUY (Maintained), 6-Month Target Price maintained at KRW 180,000
- Valuation Methodology: Applied a target P/E multiple of 19.6x (5-year historical upper average) to 2025F earnings
- Annual Earnings Forecast Revisions (K-IFRS Consolidated):
- 2024A: Revenue KRW 10.294 Trillion / Operating Profit KRW 735 Billion / Net Profit (Total) KRW 703 Billion / Net Profit (Controlling) KRW 679 Billion
- 2025F (Revised): Revenue KRW 11.293 Trillion / Operating Profit KRW 894 Billion / Net Profit (Total) KRW 731 Billion / Net Profit (Controlling) KRW 711 Billion
- 2026F (Revised): Revenue KRW 12.089 Trillion / Operating Profit KRW 1.027 Trillion / Net Profit (Total) KRW 877 Billion / Net Profit (Controlling) KRW 859 Billion
- 2027F: Revenue KRW 13.063 Trillion / Operating Profit KRW 1.187 Trillion / Net Profit (Total) KRW 970 Billion / Net Profit (Controlling) KRW 951 Billion
- Key Valuation Multiples (2024A → 2025F → 2026F → 2027F):
- PER: 14.1x → 13.3x → 11.0x → 9.9x
- PBR: 1.1x → 1.0x → 0.9x → 0.9x
- ROE: 8.2% → 7.8% → 8.8% → 9.0%
- EPS: KRW 8,752 → KRW 9,160 → KRW 11,069 → KRW 12,256
- BPS: KRW 113,261 → KRW 120,926 → KRW 130,505 → KRW 141,276
- Quarterly Performance & Outlook:
- 1Q25 Review: Revenue KRW 2.739 Trillion (YoY +4.8%, QoQ +9.9%), Operating Profit KRW 200.5 Billion (YoY +9.2%, QoQ +74.3%, OPM 7.3%), in line with consensus (OP KRW 197.7 Billion) driven by Galaxy S25 momentum and Chinese EV MLCC growth.
- 2Q25 Preview: Projected Revenue of KRW 2.721 Trillion (YoY +5.5%, QoQ -0.6%), Operating Profit of KRW 221.0 Billion (YoY +6.0%, QoQ +10.0%).
🚀 2. [Market Opportunities & Business Outlook]
- Component (MLCC) Mix Optimization & Margin Uplift:
- High-capacity MLCC demand remains solid backed by China’s expanded trade-in subsidies and on-device AI integration across smartphones.
- Increased shipments to Chinese EV OEMs drive overall capacity utilization higher (reducing fixed costs) and improve MLCC operating margins via high-margin automotive product sales.
- 1Q25 Component division revenue expanded +19% YoY.
- Package Substrate (FC-BGA) Expansion into AI:
- FC-BGA substrate sales surged +20% YoY, driving total Package division revenue growth of +17% YoY.
- Structural transition continues from PC-centric substrates toward AI servers and accelerators.
- Optics Solutions & Medium-Term Catalysts:
- Although 1Q25 Optics revenue declined -12% YoY, the segment defended profitability via Galaxy S25 launch volumes and automotive camera shipments.
- Focusing on mid-to-long-term growth engines including humanoid robotics and glass substrates.
- Structural De-risking via Portfolio Diversification:
- Despite geopolitical and tariff uncertainties clouding consumer IT demand, portfolio diversification—spanning automotive MLCCs, AI FC-BGA substrates, and automotive/robotics cameras—structurally lowers earnings volatility.
📝 Editor’s Comment (Perspective)
The analyst views Samsung Electro-Mechanics not as a cyclical component vendor vulnerable to consumer IT demand slowdowns and tariff headwinds, but as an advanced electronics hardware manufacturer establishing a resilient KRW 200 Billion+ quarterly operating profit baseline through strategic portfolio diversification into automotive and AI applications. Greater significance is attached to capacity utilization recovery and margin improvement driven by Chinese EV MLCC shipments, alongside medium-term growth potential from AI FC-BGA substrates, glass substrates, and humanoid robotics.
To verify whether this investment thesis materializes going forward, investors should monitor whether high-capacity MLCC demand in Chinese EVs and on-device IT sets supports the projected 2Q25 operating profit of KRW 221.0 Billion, whether the revenue share of AI accelerator FC-BGA substrates continues to expand within the package division, and whether development and commercialization schedules for glass substrates and humanoid robotics progress as planned. These developments can be tracked through upcoming quarterly earnings releases, official IR presentations, 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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