Brokerage : Daishin Securities
Analyst : Kang-ho Park
Investment Rating : BUY (Maintained)
Target Price : KRW 200,000 (Maintained)
Core Momentum : The commercial rollout of AI server FC-BGA substrates in H2 2024 and expanding exposure to high-value industrial and automotive MLCCs are projected to accelerate structural portfolio transformation and earnings growth.
📊 1. [Valuation & Key Financial Metrics]
- Target Price & Rating: 6-Month Target Price maintained at KRW 200,000, Rating maintained at BUY
- Stock Data (As of May 21, 2024): Current Price KRW 158,400, Market Capitalization KRW 12.05 Trillion, Foreign Ownership 31.72%
- Key Financial Forecasts (2023A → 2024F → 2025F):
- Revenue: KRW 8.91 Trillion → KRW 10.01 Trillion → KRW 10.85 Trillion
- Operating Profit: KRW 639.0 Billion → KRW 886.0 Billion → KRW 1.08 Trillion
- Net Profit (Controlling): KRW 423.0 Billion → KRW 722.0 Billion → KRW 828.0 Billion
- EPS: KRW 5,450 → KRW 9,309 → KRW 10,643
- BPS: KRW 101,129 → KRW 110,114 → KRW 120,505
- PER / PBR: 28.1x / 1.5x → 15.7x / 1.4x → 13.7x / 1.3x
- ROE: 5.5% → 8.8% → 9.2%
🚀 2. [Market Opportunities & Business Outlook]
- Q2 2024 Earnings Outlook:
- Operating profit is estimated at KRW 214.7 Billion (+19.1% QoQ), beating market consensus (KRW 209.2 Billion).
- Growth is supported by IT hardware recovery, inventory restocking by major clients, and ASP expansion via rising industrial and automotive MLCC mix.
- H2 2024 Growth Catalysts by Segment:
- Package Solution: Commercial supply of AI FC-BGA substrates to a major US tech client begins in H2 2024 alongside the ramp-up of the Vietnam facility.
- Component (MLCC): Combined industrial and automotive MLCC revenue share is projected to exceed 35% in H2 2024, sustaining high mid-teen operating margins.
- Optics & Communication: Automotive camera revenue is forecast to grow +32.4% YoY from KRW 424.5 Billion in 2023 to KRW 562.3 Billion in 2024, supplemented by folded-zoom module expansion.
- Long-Term Strategic Evolution:
- Structural transformation aligned with the paradigm shift from consumer handsets to autonomous automotive systems, AI servers, and robotics.
- Full-year revenue is expected to surpass KRW 10 Trillion for the first time in 2024, with 2025 operating profit forecast to reach KRW 1.08 Trillion (+21.9% YoY).
📝 Editor’s Comment (Perspective)
The analyst views Samsung Electro-Mechanics not merely as a legacy component maker tethered to handset shipment cycles, but as an advanced electronics player entering a structural re-rating phase propelled by commercial entry into AI server FC-BGA substrates and high-margin automotive/industrial diversification. The overarching perspective places greater significance on the qualitative margin expansion driven by server substrate supply and product mix enhancement than on cyclical smartphone volume trends.
To evaluate the ongoing progression of this investment thesis, verification should focus on whether commercial shipments of AI server FC-BGA substrates to tier-1 North American clients successfully commence in H2 2024, whether the industrial and automotive MLCC revenue share exceeds the 35% threshold in H2, and whether annual top-line crosses KRW 10 Trillion en route to over KRW 1 Trillion in operating profit by 2025. These operational developments can be monitored through upcoming quarterly earnings releases, official investor presentations, and periodic financial 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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