Brokerage : iM Securities
Analyst : Eui-young Ko, Associate: Woo-sung Son
Investment Rating : Buy (Maintain)
Target Price : KRW 180,000 (Maintained)
Core Momentum : Bolstering bottom-up fundamental quality through expanding exposure to AI server MLCCs and Big Tech ASIC FC-BGA, supported by favorable top-down macro shifts in China stimulus and Yen stabilization.
📊 1. [Valuation & Key Financial Metrics]
- Investment Rating & Target Price: Buy (Maintain) / KRW 180,000 (Maintained, applying a 10-year historical average P/B of 1.5x to 12MF BPS)
- Current Share Price (As of Dec 10, 2024): KRW 116,300 (Upside potential: 54.8%)
- Market Capitalization: KRW 8.69T
- Key Financial Metrics & Forecast:
- Revenue: 2023A KRW 8.91T → 2024E KRW 10.17T → 2025E KRW 10.81T → 2026E KRW 11.46T
- Operating Profit: 2023A KRW 639.0B → 2024E KRW 770.0B (Text: KRW 770.2B) → 2025E KRW 904.0B (Text: KRW 904.1B) → 2026E KRW 1.07T
- Net Profit: 2023A KRW 423.0B → 2024E KRW 585.0B → 2025E KRW 699.0B → 2026E KRW 841.0B
- EPS: 2023A KRW 5,450 → 2024E KRW 7,533 → 2025E KRW 9,006 → 2026E KRW 10,834
- PER: 2023A 28.1x → 2024E 15.4x → 2025E 12.9x → 2026E 10.7x
- PBR: 2023A 1.5x → 2024E 1.1x → 2025E 1.0x → 2026E 0.9x
- ROE: 2023A 5.5% → 2024E 7.2% → 2025E 8.1% → 2026E 9.0%
- Dividend Yield: 2023A 0.8% → 2024E 1.3% → 2025E 1.5% → 2026E 1.9%
- 4Q24 Earnings Forecast: Projected Revenue of KRW 2.40T (+3% YoY, -9% QoQ), Operating Profit of KRW 150.2B (+36% YoY, OPM 6.3%), missing market consensus by -9% due to weak consumer IT demand. MLCC QoQ shipment growth assumption revised from -10% to -12% (-2%p), while application diversification across business divisions continues.
🚀 2. [Market Opportunities & Business Outlook]
- Server MLCCs (Component Division): Forms a de facto duopoly with Murata in AI server MLCCs (Murata projects AI server MLCC demand to expand at a +18% CAGR from FY24 to FY30). Supported by capabilities in high-temperature/high-voltage and high-capacitance micro-components, server MLCC revenue share rose from 4% in 1Q24 to 7% in 3Q24, and is projected to exceed 10% in 2025.
- Server FC-BGA (Package Solutions): Posted solid +30% range growth in 3Q24. Driven by AMD and Big Tech custom ASICs, revenue is transitioning from server CPUs in 2024 to AI accelerators in 2025. Server exposure within FC-BGA is forecast to rise from 13% in 2023 to 29% in 2024 and 36% in 2025, pushing total FC-BGA revenue from KRW 720B to KRW 890B and KRW 1.05T respectively.
- Automotive Cameras (Optics & Communication): Generates over 15% of total camera module sales. Supported by North American EV customer volume growth and high-resolution camera adoption, sales are projected to grow >20% in 2025. The company also supplies MLCCs and FC-BGA to the same customer.
- Top-Down Catalysts: Potential expansion of China’s smartphone subsidies and the easing of extreme Japanese Yen depreciation provide favorable macro tailwinds.
📝 Editor’s Comment (Perspective)
The analyst evaluates Samsung Electro-Mechanics not through the lens of transient consumer IT softness, but as an advanced electronics hardware manufacturer undergoing fundamental bottom-up upgrades powered by AI server MLCC duopoly positioning, Big Tech custom ASIC FC-BGA ramp-up, and expanding automotive electronics supply to a North American EV customer. With the stock trading at an attractive 2025F P/B of 1.0x (a 33% discount to its 10-year historical average), the combination of structural mix enhancement and improving top-down variables (China stimulus and Yen stabilization) presents an asymmetric risk-reward profile.
To verify whether this investment thesis unfolds as anticipated, key monitoring points include server MLCCs surpassing 10% of division sales in 2025, FC-BGA annual revenue achieving KRW 1.05T alongside a 36% server revenue mix, sustained >20% revenue growth in automotive camera modules, and the tangible impact of China’s smartphone subsidies and Yen exchange rates on MLCC pricing dynamics. These factors can be monitored through upcoming quarterly financial announcements, official company 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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