Brokerage : Daishin Securities
Analyst : Kang-ho Park
Investment Rating : BUY (Maintained)
Target Price : KRW 200,000 (Maintained)
Core Momentum : Expanding on-device AI integration across smartphones and PCs, alongside concurrent volume and pricing expansion in MLCCs and substrates, is projected to accelerate earnings growth starting from Q2 2024.
📊 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 April 29, 2024): Current Price KRW 151,300, Market Capitalization KRW 11.52 Trillion, Foreign Ownership 31.49%
- 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]
- Q1 2024 Earnings Review:
- Consolidated preliminary revenue reached KRW 2.62 Trillion (+29.8% YoY) and operating profit stood at KRW 180.3 Billion (+28.7% YoY, +63.3% QoQ), beating consensus (KRW 171.3 Billion) by 5.3%.
- Optical Solution revenue crossed the KRW 1 Trillion quarterly milestone for the first time (KRW 1.17 Trillion), driven by a higher mix of Galaxy S24 Ultra (55%, +10%p YoY) and folded-zoom shipments to Chinese clients.
- Q2 2024 Outlook & Drivers:
- Q2 2024 operating profit is projected to increase +19.1% QoQ (+4.8% YoY) to KRW 214.7 Billion.
- Growth is supported by simultaneous volume (Q) gains and average selling price (P) improvements across package substrates and MLCCs.
- Shipments for AI servers, power components, and automotive applications are accelerating.
- On-Device AI & High-Value Catalysts:
- Proliferation of on-device AI in flagship smartphones and PCs drives higher adoption of ultra-small, high-capacitance MLCCs.
- Moving past initial mix improvements, Q2 2024 marks the inflection point for full-scale profit expansion backed by volume growth and utilization gains.
📝 Editor’s Comment (Perspective)
The analyst views Samsung Electro-Mechanics not merely as a cyclical component maker bound to general consumer electronics demand, but as an advanced hardware provider entering a full-scale earnings expansion cycle driven by simultaneous P (price) and Q (volume) growth from on-device AI proliferation and AI server/automotive component upgrades. The core perspective emphasizes structural volume and margin leverage over baseline consumer device volume trends.
To evaluate the ongoing progression of this investment thesis, verification should focus on whether Q2 operating profit achieves the projected +19% QoQ growth to KRW 214.7 Billion, whether high-capacitance MLCC adoption accelerates across premium on-device AI platforms, and whether rising AI server and automotive shipments sustain the full-year operating profit target of KRW 886.0 Billion. These operational milestones can be monitored through upcoming quarterly earnings releases, investor relations presentations, and periodic financial reports.
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