Brokerage : iM Securities
Analyst : Eui-young Koh, Woo-sung Sohn
Investment Rating : BUY (Maintained)
Target Price : KRW 200,000 (Maintained)
Core Momentum : Structural mix improvement toward AI servers and automotive applications, combined with MLCC utilization reaching 90% in Q3, is expected to drive steady fundamental transformation despite slow IT set demand recovery.
📊 1. [Valuation & Key Financial Metrics]
- Target Price & Rating: Target Price maintained at KRW 200,000, Rating maintained at BUY
- Stock Data (As of July 31, 2024): Closing Price KRW 159,600, Market Capitalization KRW 11.92 Trillion, Foreign Ownership 34.8%
- Key Financial Forecasts (2023 → 2024E → 2025E):
- Revenue: KRW 8.91 Trillion → KRW 10.41 Trillion → KRW 11.02 Trillion
- Operating Profit: KRW 639.0 Billion → KRW 850.0 Billion → KRW 1.05 Trillion
- Net Profit: KRW 423.0 Billion → KRW 646.0 Billion → KRW 813.0 Billion
- EPS: KRW 5,450 → KRW 8,320 → KRW 10,473
- BPS: KRW 101,129 → KRW 108,590 → KRW 117,712
- PER / PBR: 28.1x / 1.5x → 19.2x / 1.5x → 15.2x / 1.4x
- ROE: 5.5% → 7.9% → 9.3%
🚀 2. [Market Opportunities & Business Outlook]
- Q2 2024 Performance Review:
- Consolidated revenue KRW 2.6 Trillion (+16% YoY, -2% QoQ), operating profit KRW 208.1 Billion (+2% YoY, OPM 8.1%).
- The combined revenue share of industrial and automotive MLCC reached 40% (+5%p YoY), driving high-single-digit QoQ ASP improvement.
- MLCC utilization improved to 85% (+5%p QoQ), with inventory maintained at a healthy level of around 30 days.
- Package substrate performance improved on strong demand for server/automotive FC-BGA and ARM/AP/Memory BGA, while camera modules benefited from Chinese flagship demand.
- Q3 2024 Outlook:
- Revenue projected at KRW 2.7 Trillion (+13% YoY, +4% QoQ), operating profit at KRW 249.6 Billion (+36% YoY, OPM 9.3%).
- FC-BGA revenue is expected to grow nearly +20% QoQ supported by server and network applications, offset slightly by initial depreciation costs from the new Vietnam fab.
- MLCC utilization is projected to reach 90% (+5%p QoQ) with shipments up +9% QoQ (ASP flat QoQ) on solid demand for AI servers and autonomous driving applications.
- Portfolio Shift to Industrial and Automotive:
- While downstream IT demand recovery remains gradual, exposure to automotive (ADAS, xEV) and industrial (AI servers, network) segments continues to expand.
- Combined industrial and automotive revenue is forecast to grow from KRW 2.1 Trillion (23% share) in 2023 to KRW 2.7 Trillion (26%) in 2024, and KRW 3.1 Trillion (29%) in 2025.
📝 Editor’s Comment (Perspective)
The analyst views Samsung Electro-Mechanics not merely as an IT component maker constrained by sluggish near-term hardware cycles, but as a business undergoing a structural qualitative transformation toward high-margin AI server and automotive segments. The overarching perspective places greater significance on the fundamental expansion of industrial and automotive revenue toward 30% by 2025 than on short-term macro demand volatility.
To assess the progression of this investment thesis, verification should focus on whether MLCC utilization successfully reaches and sustains the 90% mark in Q3, whether blended ASP and margins remain resilient on the back of rising high-value product mix, and whether industrial/automotive revenue steadily progresses toward the target share of nearly 30% by 2025. These indicators can be tracked through upcoming quarterly earnings announcements, official IR materials, and periodic 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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