Brokerage : Daishin Securities
Analyst : Kang-ho Park, Ji-won Lee (RA)
Investment Rating : BUY (Maintained)
Target Price : KRW 260,000 (Maintained)
Core Momentum : Sustained earnings growth across 2025–2026 driven by FC-BGA revenue share surpassing 50% on AI/server expansion and high capacity utilization supported by expanding industrial and automotive MLCC mix.
📊 1. [Valuation & Key Financial Metrics]
- Investment Rating & Target Price: BUY maintained, 6-month Target Price kept at KRW 260,000, reflecting margin and utilization expansion alongside valuation multiple re-rating driven by increasing exposure to AI, server, network, and automotive sectors.
- Base Share Price (As of Oct 29, 2025): KRW 232,000 (Market Cap: KRW 17.63 Trillion, KOSPI: 4,081.15 pt, KOSPI Weight: 0.53%, Foreign Ownership: 38.61%).
- Valuation Multiples & Trend:
- PER: 2024: 14.1x → 2025(E): 27.6x → 2026(E): 19.8x → 2027(E): 17.2x
- PBR: 2024: 1.1x → 2025(E): 1.9x → 2026(E): 1.8x → 2027(E): 1.6x
- BPS: 2024: KRW 113,261 → 2025(E): KRW 120,167 → 2026(E): KRW 130,420 → 2027(E): KRW 142,586
- ROE: 2024: 8.2% → 2025(E): 7.2% → 2026(E): 9.4% → 2027(E): 9.9%
- Earnings Forecast Summary:
- 2025(E): Revenue KRW 11.23 Trillion (+0.3% vs. prev.), Operating Profit KRW 889.0 Billion (+21.0% YoY, +0.1% vs. prev., OPM 7.9%), Net Profit (Controlling) KRW 652.0 Billion (+0.3% vs. prev.), EPS KRW 8,402.
- 2026(E): Revenue KRW 12.15 Trillion (+0.3% vs. prev.), Operating Profit KRW 1.13 Trillion (+27.1% YoY, +0.8% vs. prev., OPM 9.3%), Net Profit (Controlling) KRW 911.0 Billion (+0.8% vs. prev.), EPS KRW 11,743.
- 2027(E): Revenue KRW 13.18 Trillion, Operating Profit KRW 1.34 Trillion (OPM 10.2%), Net Profit (Controlling) KRW 1.05 Trillion, EPS KRW 13,461.
- 3Q25 Results & 4Q25 Preview:
- 3Q25 Results: Revenue of KRW 2.89 Trillion (+10.5% YoY, +3.7% QoQ) and Operating Profit of KRW 260.3 Billion (+15.7% YoY, +22.2% QoQ, OPM 9.0%), beating consensus (KRW 248.5 Billion) by 4.7%. Net Profit reached KRW 219.8 Billion (+90.8% YoY, +69.5% QoQ).
- 4Q25 Outlook: Projected Revenue of KRW 2.82 Trillion (+13.1% YoY, -2.4% QoQ) and Operating Profit of KRW 215.6 Billion (+87.4% YoY, -17.2% QoQ), beating consensus (KRW 178.9 Billion).
🚀 2. [Market Opportunities & Business Outlook]
- Package Solution Division (FC-BGA Exceeds 50% & Server Growth):
- FC-BGA revenue share within the Package Solution division exceeded 50% for the first time in 3Q25.
- Revenue growth from AI and server applications, combined with higher capacity utilization at the Vietnam plant, drove profitability above previous estimates.
- Substrate division revenue grew 6% YoY in 3Q25, supported by expanding deliveries of large-area, high-layer substrates to global Big Tech customers.
- Component Division (High Utilization & Product Mix Improvement):
- MLCC capacity utilization estimated in the upper 90% range, with 3Q25 division revenue growing 15% YoY.
- Transitioned from legacy IT reliance to a structure where industrial and automotive applications account for over 50% of MLCC sales.
- Expanding industrial and automotive shipments drove blended ASP gains, creating positive price (P) and volume (Q) tailwinds. High-capacitance/high-performance demand supports upside potential for 2026 ASPs.
- Optics & Communication Division:
- Revenue grew 6% YoY in 3Q25, aided by solid foldable smartphone shipments from the strategic customer (Samsung Electronics).
📝 Editor’s Comment (Perspective)
The covering analyst views Samsung Electro-Mechanics as a company accelerating its transition toward high-value AI and server components, evidenced by FC-BGA surpassing 50% of substrate revenues and industrial/automotive applications exceeding 50% of MLCC sales. The perspective emphasizes sustained earnings expansion across 2025–2026 driven by higher utilization at the Vietnam substrate plant and simultaneous price and volume improvements (P & Q) in high-capacitance MLCCs rather than short-term hardware seasonality.
To verify whether this investment thesis materializes, key trackable checkpoints include: 1) achieving Q4 2025 Operating Profit in the KRW 210.0 Billion range (projected at KRW 215.6 Billion) to confirm consensus beat; 2) sustaining FC-BGA’s revenue share above 50% within the Package Solution division alongside high Vietnam plant utilization; and 3) realizing blended ASP expansion in MLCCs underpinned by the >50% industrial/automotive mix, supporting 2026 annual Operating Profit of KRW 1.13 Trillion. These developments can be monitored through upcoming quarterly earnings releases, official IR materials, regulatory filings, and corporate 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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