Brokerage : Hana Securities
Analyst : Rok-ho Kim, Young-gyu Kim
Investment Rating : BUY (Maintained)
Target Price : KRW 200,000 (Raised)
Core Momentum : Resilient automotive demand and high-value MLCC mix improvement driven by generative AI servers and data centers are projected to drive upward revisions in earnings forecasts.
📊 1. [Valuation & Key Financial Metrics]
- Target Price & Rating: 12-Month Target Price raised to KRW 200,000, Rating maintained at BUY
- Stock Data (As of April 19, 2024): Current Price KRW 142,900, Market Capitalization KRW 10.67 Trillion, Foreign Ownership 31.56%
- Key Financial Forecasts (2023F → 2024F):
- Revenue: KRW 8.91 Trillion → KRW 9.84 Trillion
- Operating Profit: KRW 639.4 Billion → KRW 897.1 Billion
- Net Profit: KRW 423.0 Billion → KRW 601.0 Billion
- EPS: KRW 5,450 → KRW 7,745 (YoY Growth: -56.87% → +42.11%)
- BPS: KRW 103,020 → KRW 109,643
- PER / PBR: 28.11x / 1.49x → 18.45x / 1.30x
- ROE: 5.50% → 7.42%
🚀 2. [Market Opportunities & Business Outlook]
- Q1 2024 Earnings Outlook:
- Consolidated revenue forecast at KRW 2.38 Trillion (+18% YoY, +3% QoQ) and operating profit at KRW 178.4 Billion (+27% YoY, +62% QoQ).
- Upward momentum supported by favorable FX conditions, solid Galaxy S24 initial shipments, and an enriched MLCC mix in automotive and generative AI server applications.
- Annual Forecast Upward Revisions:
- Full-year 2024 revenue is projected at KRW 9.84 Trillion (+10% YoY) with operating profit reaching KRW 897.1 Billion (+40% YoY).
- Annual operating profit estimates for 2024 and 2025 were raised by 8% and 25% respectively, reflecting structural profitability enhancements.
- Generative AI & Structural Growth Drivers:
- While generative AI servers and data centers currently account for approximately 2% of total MLCC sales, rapid growth is anticipated due to surging infrastructure demand.
- Package substrate and MLCC divisions are well-positioned to capture spillover benefits from on-device AI integration despite sluggish baseline PC and smartphone demand.
📝 Editor’s Comment (Perspective)
The analyst views Samsung Electro-Mechanics not as an IT component supplier passive to consumer hardware cycles, but as a high-value technology provider achieving structural profitability upgrades and earnings revisions through high-end mix expansion across generative AI infrastructure and automotive systems. The overarching perspective places greater significance on the margin-enhancing effect of AI-driven MLCC demand and on-device substrate resilience than on the timing of general consumer hardware volume recovery.
To evaluate the ongoing progression of this investment thesis, verification should focus on whether Q1 operating profit confirms the upward trajectory toward KRW 178.4 Billion, whether the revenue contribution from generative AI server MLCCs expands noticeably from its current 2% baseline, and whether annual operating profit tracks toward the revised KRW 897.1 Billion target (+40% YoY). These operational developments can be monitored through upcoming quarterly financial announcements, official investor relations presentations, and periodic regulatory filings.
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