Brokerage : IBK Securities
Analyst : Un-ho Kim
Investment Rating : BUY (Maintain)
Target Price : KRW 180,000 (Maintain)
Core Momentum : Faster-than-expected recovery in component and optical divisions alongside expanding Non-IT exposure driving a quarterly earnings uptrend from the 4Q23 trough
📊 1. [Valuation & Key Financial Metrics]
Target Price & Valuation Basis
- Maintained BUY rating with a Target Price of KRW 180,000
- Valuation metrics as of February 26, 2024 (Price: KRW 134,100): 2024F P/E 16.3x, P/B 1.3x, Dividend Yield (2023F) 1.4%
- 2024F EPS revised down from KRW 12,135 to KRW 8,300
Financial Forecast & Key Metrics (Consolidated)
- 2021: Revenue KRW 9.675T, Operating Profit KRW 1.487T, Pre-tax Profit KRW 1.491T, Net Profit (Controlling) KRW 892B, EPS KRW 11,500, OPM 15.4%, ROE 14.3%, P/E 17.2x, P/B 2.3x
- 2022: Revenue KRW 9.425T, Operating Profit KRW 1.183T, Pre-tax Profit KRW 1.187T, Net Profit (Controlling) KRW 981B, EPS KRW 12,636, OPM 12.6%, ROE 13.8%, P/E 10.3x, P/B 1.3x
- 2023: Revenue KRW 8.910T, Operating Profit KRW 639B, Pre-tax Profit KRW 543B, Net Profit (Controlling) KRW 423B, EPS KRW 5,451, OPM 7.2%, ROE 5.5%, P/E 28.1x, P/B 1.5x
- 2024(F): Revenue KRW 10.007T, Operating Profit KRW 788B, Pre-tax Profit KRW 885B, Net Profit (Controlling) KRW 644B, EPS KRW 8,300, OPM 7.9%, ROE 7.9%, P/E 16.3x, P/B 1.3x
- 2025(F): Revenue KRW 10.932T, Operating Profit KRW 1.115T, Pre-tax Profit KRW 1.107T, Net Profit (Controlling) KRW 805B, EPS KRW 10,373, OPM 10.2%, ROE 9.2%, P/E 13.1x, P/B 1.2x
1Q24 Outlook Revisions
- 1Q24 Revenue: KRW 2.554T (+10.8% QoQ, revised upward vs. previous forecast)
- 1Q24 Operating Profit: KRW 178.5B (+61.8% QoQ, revised upward vs. previous forecast)
🚀 2. [Market Opportunities & Business Outlook]
1Q24 Divisional Earnings Highlights
- Component (MLCC): Revenue expected to grow +14.4% QoQ; Operating profit projected to rise by +70%+ QoQ
- Optical Solutions: Revenue projected at +17.5% QoQ; Operating profit projected to more than double QoQ
- Package Substrate: Revenue estimated at -10.9% QoQ due to off-season softness
Rebound Drivers & Key Investment Points
- The 1Q24 rebound is attributed to seasonality and low customer inventory levels rather than a broad demand recovery, with this direction expected to continue into 2Q24
- Component: Non-IT (industrial) MLCC portion continues to rise, securing growth through new customer acquisitions
- Package Substrate: Expected to see a higher server mix and new product effects from ARM-related volumes in 2Q24, with server, network, and automotive segments expected to lead the recovery against IT sluggishness
- Optical Solutions: Non-smartphone application contribution expected to increase
- On-Device: Potential benefits anticipated from the emergence of On-Device AI
📝 Editor’s Comment (Perspective)
The analyst views Samsung Electro-Mechanics as a company entering a quarterly earnings uptrend following its 4Q23 low. The core perspective focuses on the initial operational rebound enabled by low channel inventory and seasonality ahead of a full-scale demand recovery, while highlighting discrete fundamental progress across divisions—such as expanding Non-IT MLCC exposure and strengthening package substrate capabilities in server and automotive applications.
To verify the execution of this investment thesis going forward, key checkpoints include monitoring whether the earnings recovery in the component and optical divisions persists into 2Q24, whether the package substrate unit realizes actual gains from server mix expansion and ARM-related new products, and whether the customer base expansion in Non-IT MLCCs continues. These developments can be tracked through upcoming quarterly earnings releases, official IR presentations, 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.
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