Brokerage : Daishin Securities
Analyst : Kang-ho Park, Ji-won Seo (RA)
Investment Rating : BUY (Maintained)
Target Price : KRW 920,000 (Raised)
Core Momentum : Valuation re-rating outlook driven by expanding FC-BGA investments for AI servers and severe MLCC supply tightness leading to product mix enrichment and price increase potential
📊 1. [Valuation & Key Financial Metrics]
- Investment Rating & Target Price: BUY maintained; 6-month Target Price raised by 67.3% to KRW 920,000.
- Valuation Methodology: Applied a target P/E of 46.5x (historical peak multiple) to 2027F EPS (+18.2% upward revision).
- 1Q26 Earnings Forecast (Analyst Estimate):
- Revenue: KRW 3.058 Trillion (+11.7% YoY, +5.4% QoQ, in line with consensus)
- Operating Profit: KRW 271.0 Billion (+35.3% YoY, +13.3% QoQ, in line with consensus)
- Net Profit: KRW 228.0 Billion (+70.5% YoY, +2.3% QoQ)
- 2Q26 Earnings Forecast:
- Revenue: KRW 3.070 Trillion (+10.2% YoY, +0.4% QoQ)
- Operating Profit: KRW 386.0 Billion (+81.2% YoY, +42.3% QoQ)
- Net Profit: KRW 315.0 Billion (+143.1% YoY, +38.3% QoQ)
- Annual Earnings Forecasts (2026F – 2028F):
- 2026F: Revenue KRW 12.703 Trillion / Operating Profit KRW 1.534 Trillion (+68% YoY, +8.7% revision) / Controlling Net Profit KRW 1.246 Trillion
- 2027F: Revenue KRW 13.830 Trillion / Operating Profit KRW 1.936 Trillion (+28.2% YoY, +16.4% revision) / Controlling Net Profit KRW 1.534 Trillion
- 2028F: Revenue KRW 14.252 Trillion / Operating Profit KRW 1.977 Trillion / Controlling Net Profit KRW 1.570 Trillion
- Key Financial Multiples (2026F):
- EPS: KRW 16,051 (+10.2% revision)
- P/E: 42.4x / P/B: 4.9x
- ROE: 12.2% / Operating Margin (OPM): 12.1%
🚀 2. [Market Opportunities & Business Outlook]
- FC-BGA & Package Solution Division:
- 2026 FC-BGA revenue is projected at KRW 1.7 Trillion (+45.5% YoY).
- The Package Solution division’s contribution to total company operating profit is expected to rise to 28%, up 13%p YoY.
- Expanding orders from AI server and ASIC clients are expected to bring facilities to full utilization by 4Q26.
- If the planned additional investment in Vietnam is finalized in 2Q26, capacity and revenue are projected to reach global No. 1 tier in the AI segment by 2028.
- MLCC Division:
- Severe supply tightness is projected as demand and market share expand in AI semiconductors and data center infrastructure.
- Book-to-Bill (BB) ratio expanded from 1.0 in late 2025 to 1.2–1.3, signaling orders outpacing shipments and fostering favorable conditions for price increases.
- Capacity utilization remains high at 95–100% in 2026, sustaining levels seen since 2025.
- Potential price hikes in 2H26 present unmodeled upside to current earnings estimates.
- Glass Substrate Commercialization:
- Progressing from R&D and sampling stages into initial prototype mass-production equipment installation.
- Preemptive investments ahead of Japanese peers are evaluated as a strategic initiative to secure leadership in next-generation packaging.
📝 Editor’s Comment (Perspective)
The analyst views Samsung Electro-Mechanics not merely as a conventional passive component supplier, but as a premier AI hardware platform company advancing toward global market leadership through aggressive capacity additions in high-layer substrates and tightening passive component supply. The underlying analytical perspective places greater strategic significance on reaching full utilization in AI server FC-BGA and MLCC lines, enriching high-margin product mix, and capturing structural pricing power rather than general cyclical set recoveries.
To assess whether this investment thesis continues to materialize, key tracking points include the formal approval of the Vietnam FC-BGA expansion in 2Q26, the sustainability of the MLCC Book-to-Bill ratio (1.2–1.3) and high utilization (95%+), and the realization of broad-based price increases in the second half of the year. These developments can be verified through upcoming quarterly earnings releases, official company IR presentations, periodic regulatory filings (quarterly and annual reports), and DART disclosures.
📢 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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