Brokerage : iM Securities
Analyst : Eui-young Koh
Investment Rating : BUY (Maintained)
Target Price : KRW 200,000 (Maintained)
Core Momentum : Surging high-capacitance MLCC demand across AI devices and servers, combined with substrate utilization recovery in AI accelerators, is expected to accelerate structural margin expansion in industrial and automotive segments.
📊 1. [Valuation & Key Financial Metrics]
- Target Price & Rating: 12-Month Target Price maintained at KRW 200,000, Rating maintained at Buy
- Stock Data (As of July 2, 2024): Closing Price KRW 153,800, Market Capitalization KRW 11.70 Trillion, Foreign Ownership 33.2%
- Key Financial Forecasts (2023 → 2024E → 2025E):
- Revenue: KRW 8.91 Trillion → KRW 10.06 Trillion → KRW 10.71 Trillion
- Operating Profit: KRW 639.0 Billion → KRW 871.0 Billion → KRW 1.03 Trillion
- Net Profit: KRW 423.0 Billion → KRW 665.0 Billion → KRW 801.0 Billion
- EPS: KRW 5,450 → KRW 8,570 → KRW 10,328
- BPS: KRW 101,129 → KRW 108,839 → KRW 117,816
- PER / PBR: 28.1x / 1.5x → 17.9x / 1.4x → 14.9x / 1.3x
- ROE: 5.5% → 8.2% → 9.1%
🚀 2. [Market Opportunities & Business Outlook]
- Q2 2024 Outlook & Industry Conditions:
- Revenue is estimated at KRW 2.4 Trillion (+10% YoY, -7% QoQ) and operating profit at KRW 206.2 Billion (+1% YoY, OPM 8.5%).
- While consumer handset production remains sluggish, industrial (server/network) and automotive segments demonstrate solid resilience.
- Portfolio Shift to AI & Automotive Segments:
- Automotive and industrial revenue share is forecast to climb from KRW 2.1 Trillion (23%) in 2023 to KRW 2.6 Trillion (25%) in 2024, and KRW 2.9 Trillion (28%) in 2025.
- Automotive MLCC: Forecast at KRW 723.0 Billion (20% share) in 2023 → KRW 881.9 Billion (22%) in 2024 → KRW 1.03 Trillion (24%) in 2025. Component OPM is projected to improve from 9.8% in 2023 to 12.8% in 2024 and 14.3% in 2025.
- MLCC Content Growth: Higher capacitance requirements driven by AI smartphones (+10%+), AI PCs (+30~40%+), and AI servers (2–3x vs. conventional servers) beginning in 2025.
- Substrate Recovery & Camera Expansion:
- Package Substrates: Commenced mass production of BT substrates for ARM-based CPUs in Copilot+ PCs. Utilization recovery will be driven by new client SoC launches in 2H24 and AI accelerator (GPU/ASIC) substrate mass production in 4Q24. Glass substrate pilot line setup is planned for late 2024/early 2025.
- Camera Modules: Client base expanding from North American EV makers to domestic OEMs in 4Q24, with long-term positioning for robotics applications.
📝 Editor’s Comment (Perspective)
The analyst views Samsung Electro-Mechanics not merely as an electronic component supplier burdened by sluggish consumer IT hardware volume, but as an advanced hardware enabler positioned for structural margin expansion driven by high-capacitance AI/automotive MLCC mix and next-generation substrate ramp-ups. The overarching perspective emphasizes medium-term margin enrichment and valuation multiple expansion resulting from rising industrial/automotive revenue over short-term mobile cycle headwinds.
To assess the progression of this investment thesis moving forward, verification should focus on whether commercial mass production of AI accelerator substrates for servers and CSPs begins on schedule in 4Q24, whether the Component division’s operating margin expands toward 14.3% by 2025, and whether combined industrial and automotive revenue achieves the projected 28% top-line share in 2025. These operational milestones can be monitored through upcoming quarterly earnings releases, official company presentations, and periodic financial reports.
📢 Disclaimer & Source
Source: This content has been structured and newly written based on officially disclosed financial facts and data from brokerage reports.
Investment Risk Notice: This content is provided for informational and linguistic reference purposes only. Under no circumstances does it constitute financial advice or a recommendation to buy or sell any specific securities. All investment decisions and financial responsibilities rest entirely with the investor.
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