Brokerage : Kyobo Securities
Analyst : Bo-young Choi
Investment Rating : BUY (Maintained)
Target Price : KRW 200,000 (Maintained)
Core Momentum : Rising high-spec MLCC content across AI servers and automotive segments, paired with a recovery in packaging substrates and future glass substrate initiatives, is expected to sustain earnings expansion.
📊 1. [Valuation & Key Financial Metrics]
- Target Price & Rating: Target Price maintained at KRW 200,000, Rating maintained at BUY
- Stock Data (As of April 29, 2024): Current Price KRW 151,300, Market Capitalization KRW 11.51 Trillion, Foreign Ownership 31.50%
- Key Financial Forecasts (2023.12 → 2024.12E → 2025.12E):
- Revenue: KRW 8.91 Trillion → KRW 10.24 Trillion → KRW 11.31 Trillion
- Operating Profit: KRW 639.0 Billion → KRW 912.0 Billion (+42.6% YoY) → KRW 1.12 Trillion
- Net Profit: KRW 450.0 Billion → KRW 710.0 Billion → KRW 876.0 Billion
- EPS: KRW 5,617 → KRW 8,882 → KRW 10,967 (YoY: -56.9% → +58.1% → +23.5%)
- PER / PBR: 27.3x / 1.5x → 17.0x / 1.4x → 13.8x / 1.3x
- OP Margin: 7.2% → 8.9% → 9.9%
- ROE: 5.5% → 8.2% → 9.4%
🚀 2. [Market Opportunities & Business Outlook]
- Q1 2024 Performance Review:
- Consolidated revenue reached KRW 2.62 Trillion (+29.8% YoY, +13.8% QoQ) and operating profit stood at KRW 180.3 Billion (+28.7% YoY, +63.3% QoQ), beating consensus (KRW 171.3 Billion).
- Component: Capacity utilization reached 80% with ASP rising +3%; channel inventory stayed healthy at under 5 weeks, supported by high-value AI server/power mix enrichment and favorable FX.
- Optics & Communication: Solid results driven by flagship product launches, expanding high-spec variable aperture modules for Chinese clients, and automotive camera growth.
- Package Solution: Impacted by continued weakness in mobile, consumer PCs, and server/network demand.
- Q2 2024 Outlook & Annual Trajectory:
- Q2 2024 revenue is forecast at KRW 2.38 Trillion (+7.4% YoY) and operating profit at KRW 213.1 Billion (+4.0% YoY, OPM 8.9%).
- Full-year 2024 revenue is projected to expand +15.0% YoY to KRW 10.24 Trillion, with operating profit surging +42.6% YoY to KRW 911.6 Billion.
- Segment Growth Drivers & Emerging Tech:
- Component: Expanding seasonal shipments and higher utilization driven by industrial, automotive, and Greater China demand.
- Package Solution: Rebound in BGA mobile memory and low-base recovery in FC-BGA PC applications.
- Glass Substrates: Medium- to long-term upside optionality from the establishment of an AI-oriented glass substrate pilot line.
📝 Editor’s Comment (Perspective)
The analyst views Samsung Electro-Mechanics not merely as a cyclical component maker constrained by consumer IT demand, but as an enterprise entering a structural earnings upgrade phase propelled by high-capacitance AI server/automotive MLCC adoption and substrate business normalization. The overarching perspective places greater significance on the high-value product mix transformation and next-generation packaging capabilities (such as glass substrates) than on short-term hardware volume fluctuations.
To evaluate the ongoing progression of this investment thesis, verification should focus on whether Component capacity utilization and shipments maintain an operating margin above 8.9% in Q2, whether BGA and FC-BGA lines confirm a sequential earnings rebound in Package Solution, and whether the construction and timeline of the glass substrate pilot line proceed as scheduled. These operational developments can be monitored through upcoming quarterly financial announcements, investor relations materials, and official regulatory filings.
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