Brokerage : Hana Securities
Analyst : Rok-ho Kim, RA: Kang-ho Park
Investment Rating : BUY (Maintained)
Target Price : KRW 200,000 (Maintained)
Core Momentum : Driving structural margin expansion via higher AI server and automotive (ADAS) exposure, coupled with anticipated smartphone demand recovery from China’s trade-in subsidies.
📊 1. [Valuation & Key Financial Metrics]
- Investment Rating & Target Price: BUY (Maintained) / KRW 200,000 (Maintained, 12M Target Price)
- Current Share Price (As of Jan 24, 2025): KRW 128,100
- Key Financial Metrics & Forecast:
- Revenue: 2023A KRW 8.91T → 2024F KRW 10.31T (+15.7% YoY) → 2025F KRW 11.07T (+7.3% YoY)
- Operating Profit: 2023A KRW 639.4B → 2024F KRW 728.3B (+13.9% YoY, OPM 7.1%) → 2025F KRW 930.2B (+27.7% YoY, OPM 8.4%)
- Net Profit: 2023A KRW 423.0B → 2024F KRW 679.2B → 2025F KRW 705.9B
- EPS: 2023A KRW 5,450 → 2024F KRW 8,752 (+60.59% YoY) → 2025F KRW 9,097 (+3.94% YoY)
- PER: 2023A 28.11x → 2024F 14.15x → 2025F 14.08x
- PBR: 2023A 1.49x → 2024F 1.10x → 2025F 1.07x
- ROE: 2023A 5.50% → 2024F 8.28% → 2025F 7.96%
- DPS: 2023A KRW 1,150 → 2024F KRW 1,150 → 2025F KRW 1,150
- 4Q24 Earnings Review: Revenue of KRW 2.49T (+8.1% YoY, -4.7% QoQ), Operating Profit of KRW 115.0B (+4.2% YoY, -48.8% QoQ, OPM 4.6%), with operating profit missing consensus due to year-end incentive payments and customer inventory destocking.
- 1Q25 Earnings Outlook: Projected Revenue of KRW 2.65T (+0.9% YoY, +6.3% QoQ), Operating Profit of KRW 200.0B (+10.9% YoY, +73.8% QoQ, OPM 7.5%).
🚀 2. [Market Opportunities & Business Outlook]
- Component Division (MLCC): Combined AI server and automotive MLCC portion is expected to exceed 40% in 1Q25. Full-year 2025 revenue is projected at KRW 5.03T (+12.7% YoY) with Operating Profit of KRW 603.1B (OPM 12.0%), settling into a double-digit operating margin.
- Package Solution Division: Despite softness in standard BGA for mobile APs and memory, growth in server/network FCBGA supports earnings. High-end server and automotive FCBGA share has surpassed 50%, driving 2025 revenue to KRW 2.25T (+10.5% YoY) and Operating Profit to KRW 222.4B (OPM 9.9%).
- Optics & Communication Solution Division: Continued shipment of premium zoom and high-resolution camera modules to Chinese flagship smartphone makers. Projected 2025 revenue of KRW 3.79T and Operating Profit of KRW 104.7B (OPM 2.8%).
- China Policy Catalysts: Trade-in policies are accelerating channel inventory reduction for smartphones, paving the way for increased component replenishment orders starting in 2Q25 once channel depletion concludes.
📝 Editor’s Comment (Perspective)
The analyst views Samsung Electro-Mechanics not as a cyclical commodity vendor dependent on general smartphone volumes, but as a transforming hardware specialist elevating its baseline profitability through high-value product mix shifts toward AI servers and automotive (ADAS) electronics. The perspective highlights structural profitability improvements across core divisions (MLCC and packaging) that support double-digit segment margins even before a broad volume recovery in consumer electronics takes place.
To verify whether this investment thesis unfolds as anticipated, key monitoring points include whether AI and automotive MLCC revenue maintains its >40% contribution while driving the Component division’s margin to ~12%, the sustained >50% proportion of server/automotive products within FCBGA, and the timing and magnitude of smartphone component order rebounds in 2Q25 following channel destocking under China’s trade-in subsidies. These indicators can be tracked via future quarterly earnings announcements, official company IR materials, and regular business reports.
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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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