Brokerage : Daishin Securities
Analyst : Kang-ho Park
Investment Rating : BUY (Maintain)
Target Price : KRW 200,000 (Maintain)
Core Momentum : Swift 1Q24 profitability turnaround driven by flagship launch effects, post-destocking MLCC utilization recovery, and high-capacitance product mix improvement
📊 1. [Valuation & Key Financial Metrics]
Target Price & Valuation Basis
- Maintained BUY rating with a 6-month Target Price of KRW 200,000 (Top Pick in IT hardware/components)
- Current price (Jan 31, 2024): KRW 139,600 with 2024F P/E of 16.9x and P/B of 1.3x
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, BPS KRW 86,584, P/E 17.2x, P/B 2.3x, ROE 14.3%
- 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, BPS KRW 97,145, P/E 10.3x, P/B 1.3x, ROE 13.8%
- 2023(F): Revenue KRW 8.909T, Operating Profit KRW 639B, Pre-tax Profit KRW 543B, Net Profit (Controlling) KRW 423B, EPS KRW 5,450, BPS KRW 100,630, P/E 28.1x, P/B 1.4x, ROE 5.5%
- 2024(F): Revenue KRW 9.954T, Operating Profit KRW 848B (+32.6% YoY), Pre-tax Profit KRW 818B, Net Profit (Controlling) KRW 641B, EPS KRW 8,259, BPS KRW 106,926, P/E 16.9x, P/B 1.3x, ROE 8.0%
- 2025(F): Revenue KRW 10.797T, Operating Profit KRW 1.082T, Pre-tax Profit KRW 1.051T, Net Profit (Controlling) KRW 824B, EPS KRW 10,613, BPS KRW 115,576, P/E 13.2x, P/B 1.2x, ROE 9.5%
4Q23 Results Review & 1Q24 Outlook
- 4Q23 Results: Revenue KRW 2.306T (+17.2% YoY, -2.3% QoQ), Operating Profit KRW 110.0B (+9.1% YoY, -40.0% QoQ), Net Profit KRW 43.0B (-61.3% YoY, -72.1% QoQ), meeting market consensus (KRW 118.0B)
- 1Q24 Outlook (E): Revenue KRW 2.414T (+19.4% YoY, +4.7% QoQ), Operating Profit KRW 161.0B (+14.7% YoY, +45.5% QoQ; text notes KRW 160.6B), Net Profit KRW 119.0B (+6.8% YoY, +173.9% QoQ)
🚀 2. [Market Opportunities & Business Outlook]
4Q23 Business Segment Dynamics
- End-market destocking (smartphones, TV, PC) lowered MLCC utilization and slowed semiconductor substrates and camera module sales, contracting OPM by 3%p QoQ
- Divisional top-line: MLCC revenue fell -11% QoQ, whereas package substrates gained +0.7% QoQ and optical solutions rose +7.6% QoQ
1Q24 & FY2024 Segment Outlook
- Optical Solutions: 1Q24 revenue projected to increase +13% QoQ driven by the Galaxy S24 rollout alongside on-device AI replacement demand; momentum to continue in 2Q24 on folded zoom camera supply to Chinese customers
- Component (MLCC): Sequential earnings recovery projected across 1Q24 and 2Q24 from the 4Q23 low; supported by completed channel inventory digestion, higher shipments to Chinese smartphone makers, and expanding automotive and high-capacitance mix driving simultaneous gains in volume (Q) and price (P)
- AI & Mobility Expansion: Growing demand in generative/on-device AI and mobility hardware expected to expand overall shipments for package substrates and MLCCs
📝 Editor’s Comment (Perspective)
The analyst views Samsung Electro-Mechanics as a sector leader positioned for an earnings rebound that is faster than IT peers, having cleared its 4Q23 inventory adjustment trough on the strength of new flagship launches and lean channel inventories. The perspective places greater emphasis on near-term earnings visibility fueled by product mix enhancements—including on-device AI adoption, folded zoom camera adoption, and simultaneous price-volume improvements in high-capacitance and automotive MLCCs.
To verify the execution of this investment thesis going forward, key checkpoints include assessing whether optical solution growth extends into 2Q24 supported by folded zoom camera shipments to Chinese clients, and whether the MLCC division sustains utilization recovery alongside simultaneous gains in volume and ASP from automotive and high-capacitance product expansion. These developments can be tracked through upcoming quarterly earnings releases, official IR presentations, and periodic regulatory filings.
📢 Disclaimer & Source
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