Brokerage : HI Investment & Securities
Analyst : Eui-young Koh
Investment Rating : BUY (Maintained)
Target Price : KRW 185,000 (Maintained)
Core Momentum : Rising high-capacitance MLCC requirements driven by generative AI and expanding high-value FC-BGA substrates for AI servers and PCs are expected to accelerate structural business upgrading.
📊 1. [Valuation & Key Financial Metrics]
- Target Price & Rating: 12-Month Target Price maintained at KRW 185,000, Rating maintained at Buy
- Stock Data (As of April 29, 2024): Closing Price KRW 151,300, Market Capitalization KRW 11.30 Trillion, Foreign Ownership 31.5%
- Key Financial Forecasts (2023 → 2024E → 2025E):
- Revenue: KRW 8.91 Trillion → KRW 10.03 Trillion → KRW 10.73 Trillion
- Operating Profit: KRW 639.0 Billion → KRW 874.0 Billion (+37% YoY) → KRW 1.01 Trillion
- Net Profit: KRW 423.0 Billion → KRW 668.0 Billion → KRW 785.0 Billion
- EPS: KRW 5,450 → KRW 8,604 → KRW 10,119
- BPS: KRW 101,129 → KRW 108,873 → KRW 117,642
- PER / PBR: 28.1x / 1.5x → 17.6x / 1.4x → 15.0x / 1.3x
- ROE: 5.5% → 8.2% → 8.9%
🚀 2. [Market Opportunities & Business Outlook]
- Q1 2024 Review & Q2 2024 Outlook:
- Q1 2024 revenue stood at KRW 2.6 Trillion (+30% YoY, +14% QoQ) and operating profit at KRW 180.3 Billion (+29% YoY, OPM 6.9%).
- While Q1 MLCC volume was flat QoQ, ASP rose +3% QoQ supported by expanding industrial/automotive mix and favorable FX.
- Q2 2024 revenue is forecast at KRW 2.4 Trillion (+9% YoY, -8% QoQ) and operating profit at KRW 209.5 Billion (+2% YoY, OPM 8.7%), raised by +7% versus previous estimates.
- Capacity Utilization & Structural Portfolio Upgrades:
- MLCC capacity utilization is rebounding steadily from its 4Q23 trough: 4Q23 75% → 1Q24 80% → 2Q24E 85% → 3Q24E 88%.
- Portfolio quality is upgrading around HEV MLCCs, AI server/PC MLCCs, and advanced FC-BGA, with company guidance pointing to AI-related sales doubling annually.
- Generative AI Drivers & Next-Gen Tech:
- MLCC Content Density: Higher capacitance demand seen across AI smartphones (+10%+), AI PCs, and AI servers (+150%+ vs. conventional servers).
- Package Substrates: Solid demand for AI server FC-BGA (16+ layers, large-body form factor) with acceleration in AI server/PC substrate lines in 2H24.
- Glass Core Substrates: Targeting pilot line setup by late 2024, customer sample deliveries in 2025, and commercial mass production from 2026 for large-area AI chiplet packaging.
📝 Editor’s Comment (Perspective)
The analyst views Samsung Electro-Mechanics not merely as an IT component supplier exposed to consumer hardware weakness, but as a structurally advancing hardware enabler upgrading its business mix through surging high-capacitance MLCC adoption and high-end substrate expansion tailored for generative AI and automotive electrification (ADAS/HEV). The core perspective places greater significance on content-per-box expansion across AI platforms and the strategic development of high-performance packaging (such as AI FC-BGA and glass substrates) than on baseline consumer PC/mobile shipment volumes.
To evaluate the ongoing progression of this investment thesis, verification should focus on whether MLCC capacity utilization recovers toward 88% in Q3 alongside sustained ASP resilience, whether high-layer AI server and PC FC-BGA substrates drive top-line expansion in 2H24, and whether the glass substrate pilot line is established on schedule by late 2024. These operational milestones can be monitored through upcoming quarterly financial announcements, investor relations materials, and periodic regulatory filings.
📢 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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