Brokerage : Daishin Securities
Analyst : Kang-ho Park
Investment Rating : BUY (Maintained)
Target Price : KRW 200,000 (Maintained, 6M Target Price)
Core Momentum : Sustaining robust operating profit growth in 2024 (+30.4% YoY) and 2025 (+29.9% YoY) driven by the initial revenue recognition of AI server FC-BGA substrates starting 3Q24 alongside rising MLCC fab utilization and mix enrichment.
📊 1. [Valuation & Key Financial Metrics]
- Investment Rating & Target Price: BUY (Maintained) / KRW 200,000 (Maintained, 6M Target Price)
- Current Share Price (As of Jul 31, 2024): KRW 159,600
- Market Capitalization: KRW 12.13T
- Key Financial Metrics & Forecast:
- Annual Operating Profit: 2024F KRW 833.5B (+30.4% YoY) → 2025F KRW 1.08T (Text: KRW 1.08T, +29.9% YoY)
- 2Q24 Earnings Review: Consolidated Revenue of KRW 2.58T (+16.2% YoY, -1.7% QoQ), Operating Profit of KRW 208.1B (Table: KRW 208.0B, +1.5% YoY, +15.4% QoQ, OPM 8.1% [+1.2%p QoQ]). Operating profit slightly missed prior internal forecasts (KRW 214.7B) but met market consensus (KRW 207.8B / Table: KRW 207.0B). Optics Solutions fell -22% QoQ due to off-season conditions, while Component (MLCC) rose +13% QoQ on automotive/industrial strength and Package Solutions surged +17% QoQ on Vietnam plant ramp-up, beating consensus.
- 3Q24 Earnings Forecast: Projected Revenue of KRW 2.695T (+14.2% YoY, +4.5% QoQ), Operating Profit of KRW 240.6B (Table: KRW 241.0B, +30.8% YoY, +15.6% QoQ), Net Profit of KRW 207.0B (+32.8% YoY, +19.8% QoQ).
🚀 2. [Market Opportunities & Business Outlook]
- Package Solutions (FC-BGA): Revenue recognition for AI server FC-BGA substrates begins in 3Q24. Securing global client wins expands the portfolio from PCs and general servers to AI servers.
- Component Division (MLCC): Margin improvement accelerates in 3Q24 through higher fab utilization and blended ASP gains, supported by solid automotive and industrial demand. High-capacitance content expansion driven by 2025 AI hardware replacement cycles will deliver strong mix gains amid elevated utilization.
📝 Editor’s Comment (Perspective)
The analyst views Samsung Electro-Mechanics not just through quarterly consensus alignment, but as an advanced electronics hardware manufacturer entering a high-margin expansion phase as AI server FC-BGA revenues materialize in 3Q24. The investment thesis looks beyond short-term seasonality to emphasize robust multi-year earnings trajectories (+30.4% YoY in 2024 to KRW 833.5B and +29.9% YoY in 2025 to KRW 1.08T) underpinned by expanding high-value MLCC and FC-BGA mix as AI hardware adoption accelerates across the industry.
To verify whether this investment thesis unfolds as anticipated, key tracking points include achieving the 3Q24 operating profit forecast (KRW 240.6B, +30.8% YoY), meeting full-year operating profit projections (KRW 833.5B in 2024 and KRW 1.08T in 2025), tangible revenue ramp-up from AI server FC-BGA substrates starting 3Q24, and sustained blended ASP expansion in MLCCs driven by AI replacement cycles. These factors can be monitored through upcoming quarterly financial announcements, official company IR presentations, and regulatory filings.
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