Brokerage : Kiwoom Securities
Analyst : So-won Kim
Investment Rating : BUY (Maintain)
Target Price : KRW 180,000 (Lowered)
Core Momentum : Poised for earnings and valuation recovery in 2025 past the 4Q24 trough, driven by expanding content of high-capacitance MLCCs and commercial delivery of AI accelerator FC-BGA substrates to global Big Tech customers.
📊 1. [Valuation & Key Financial Metrics]
- Investment Rating & Target Price: BUY (Maintain) / KRW 180,000 (Lowered, reflecting revised earnings forecasts)
- Current Share Price (As of Dec 16, 2024): KRW 127,500
- Market Capitalization: KRW 9.52T
- Key Financial Metrics & Forecast:
- Revenue: 2023A KRW 8.91T → 2024F KRW 10.18T → 2025F KRW 11.15T (+9% YoY)
- Operating Profit: 2023A KRW 639.4B → 2024F KRW 757.1B (OPM 7.4%) → 2025F KRW 937.0B (+24% YoY, OPM 8.4%)
- Net Profit: 2023A KRW 450.5B → 2024F KRW 623.0B → 2025F KRW 775.4B
- Net Profit (Controlling): 2023A KRW 423.0B → 2024F KRW 585.0B → 2025F KRW 728.1B
- EPS: 2023A KRW 5,450 → 2024F KRW 7,538 (+38.3% YoY) → 2025F KRW 9,382 (+24.5% YoY)
- PER: 2023A 28.1x → 2024F 16.7x → 2025F 13.4x
- PBR: 2023A 1.51x → 2024F 1.17x → 2025F 1.09x
- ROE: 2023A 5.5% → 2024F 7.2% → 2025F 8.4%
- 4Q24 Earnings Forecast: Projected Revenue of KRW 2.36T (+2% YoY, -10% QoQ), Operating Profit of KRW 143.8B (+30% YoY, -36% QoQ), missing market consensus (KRW 164.1B) due to smartphone seasonal inventory destocking. However, demand for AI server MLCCs and server CPU FC-BGA remains resilient.
🚀 2. [Market Opportunities & Business Outlook]
- Component Division (MLCC): Holds an estimated ~38% market share in AI server MLCCs, forming a duopoly alongside Japan’s Murata (>40% share). Structural supply-demand improvements anticipated in 2025 driven by higher content per device and expanding high-capacitance MLCC mix causing fab capacity loss.
- Package Substrate Division: Undergoing product validation with majority of global Big Tech firms developing custom AI ASICs. Securing these Big Tech clients is expected to accelerate commercial AI accelerator FC-BGA shipments and lift AI-related revenue share in 2025.
- China Policy Tailwinds: Increased subsidy funding and widened coverage under China’s trade-in policy are expected to support smartphone demand recovery, benefiting both MLCC and camera module businesses.
📝 Editor’s Comment (Perspective)
The analyst views Samsung Electro-Mechanics not as a commodity component supplier bound by short-term smartphone inventory destocking, but as an advanced electronics hardware manufacturer passing its 4Q earnings trough to capture structural growth from generative AI hardware penetration. The core thesis emphasizes that current valuation levels (2025F P/B ~1.1x) significantly lag historical multiples (5-year average 1.5x), creating substantial room for valuation normalization as high-margin AI server MLCCs and Big Tech FC-BGA substrates expand.
To evaluate whether this investment thesis unfolds as projected, key tracking points include whether full-year 2025 operating profit reaches the projected KRW 937.0B, whether the company maintains its ~38% oligopolistic share in AI server MLCCs amidst high-capacitance supply-demand tightening, the commercial mass production timing of AI accelerator FC-BGA for global Big Tech accounts, and the actual lift in Chinese smartphone component orders from enhanced trade-in subsidies. These factors can be monitored through upcoming quarterly earnings releases, official company IR materials, and regular 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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