Brokerage : Daishin Securities
Analyst : Kang-ho Park
Investment Rating : BUY (Maintained)
Target Price : KRW 180,000 (Lowered by -10%)
Core Momentum : Poised for a 21.2% YoY operating profit expansion in 2025 driven by mid-80% MLCC fab utilization, high-capacitance mix improvement from AI/automotive demand, and the commercial ramp of server FC-BGA substrates.
📊 1. [Valuation & Key Financial Metrics]
- Investment Rating & Target Price: BUY (Maintained) / KRW 180,000 (Lowered by -10% from KRW 200,000, reflecting cuts to 2024F and 2025F EPS of -20.6% and -12.3% respectively, applying a target P/E of 18.4x to 2025F EPS)
- Current Share Price (As of Oct 29, 2024): KRW 120,200
- Market Capitalization: KRW 9.14T
- Key Financial Metrics & Forecast:
- Revenue: 2023A KRW 8.91T → 2024F KRW 10.21T → 2025F KRW 10.82T (Text: KRW 10.8T) → 2026F KRW 11.95T
- Operating Profit: 2023A KRW 639.0B → 2024F KRW 784.0B (Revised down from KRW 835.0B, OPM 7.7%) → 2025F KRW 950.0B (Revised down from KRW 1.08T, +21.2% YoY, OPM 8.8%) → 2026F KRW 1.19T (OPM 9.9%)
- Net Profit (Controlling): 2023A KRW 423.0B → 2024F KRW 589.0B (Down -20.6%) → 2025F KRW 761.0B (Down -12.3%) → 2026F KRW 955.0B
- EPS: 2023A KRW 5,450 → 2024F KRW 7,594 (Down -20.6% from KRW 9,569) → 2025F KRW 9,808 (Down -12.3% from KRW 11,185) → 2026F KRW 12,302
- PER: 2023A 28.1x → 2024F 15.0x → 2025F 12.4x → 2026F 9.9x
- PBR: 2023A 1.5x → 2024F 1.1x → 2025F 1.0x → 2026F 0.9x
- ROE: 2023A 5.5% → 2024F 7.2% → 2025F 8.7% → 2026F 9.9%
- 3Q24 Earnings Review: Consolidated Revenue of KRW 2.62T (+11.0% YoY, +1.7% QoQ), Operating Profit of KRW 224.9B (+19.5% YoY, +6.3% QoQ, OPM 8.6%). Revenue slightly missed Daishin’s estimate (KRW 2.68T) and market consensus (KRW 2.64T), while operating profit also slightly missed Daishin’s estimate (KRW 239.0B) and market consensus (KRW 236.2B). Growth was supported by MLCC fab utilization, blended ASP gains, and initial server FC-BGA revenue recognition.
- 4Q24 Earnings Preview: Projected Revenue of KRW 2.39T (+3.6% YoY, -8.6% QoQ), Operating Profit of KRW 171.0B (+54.6% YoY, -24.1% QoQ), reflecting off-season softness and weaker consumer IT device demand.
🚀 2. [Market Opportunities & Business Outlook]
- Component Division (MLCC): Maintained mid-80% fab utilization (86% in 3Q24). Despite muted general IT demand, automotive/industrial share gains and rising market share supported growth. In 2025, increased adoption of AI features across IT devices is expected to expand high-capacitance MLCC unit requirements and lift blended ASPs.
- Package Substrate Division: While PC substrate demand remains soft, the start and expansion of server FC-BGA shipments are set to drive revenue growth and rapid profitability recovery across 4Q24 and 2025.
- 2025 Outlook: Full-year 2025 Revenue is projected at KRW 10.8T (+6% YoY) with Operating Profit reaching KRW 950.0B (+21.2% YoY), approaching the KRW 1T threshold for the first time in three years.
📝 Editor’s Comment (Perspective)
The analyst views Samsung Electro-Mechanics through the lens of a necessary target price adjustment (lowered by 10% to KRW 180,000) triggered by downward revisions to 2024F and 2025F EPS (-20.6% and -12.3% respectively) amid transient 4Q off-season softness, while underscoring that core operational efficiency remains solid. The investment thesis highlights healthy mid-80% MLCC utilization and structural product mix enrichment—driven by rising MLCC content per box from device-level AI integration and server FC-BGA ramp-up—delivering strong +21.2% YoY operating profit growth in 2025.
To evaluate whether this thesis progresses as projected, key tracking points include the attainment of the full-year 2025 operating profit forecast (KRW 950.0B), sustaining MLCC fab utilization in the mid-80% range alongside rising blended ASPs for AI and automotive applications, and revenue acceleration from server FC-BGA substrates to validate packaging margin recovery. These factors can be monitored through upcoming quarterly financial announcements, official company IR presentations, and regulatory filings.
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Source: This content has been structured and newly written based on officially disclosed financial facts and data from brokerage reports.
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