Brokerage : Daishin Securities
Analyst : Kangho Park
Investment Rating : BUY (Maintained)
Target Price : KRW 180,000 (Maintained)
Core Momentum : Expanding product mix across automotive, AI, and industrial MLCCs alongside FC-BGA growth defends baseline profitability and paves the way for operating profit to surpass KRW 1 Trillion in 2026.
📊 1. [Valuation & Key Financial Metrics]
- Rating & Target Price: BUY (Maintained), 6-Month Target Price of KRW 180,000 maintained
- Valuation Methodology: Applied a target P/E multiple of 20x (5-year historical upper average) to 2025F earnings
- Annual Earnings Forecast Revisions:
- 2025F: Revenue KRW 11.263 Trillion / SG&A KRW 1.236 Trillion / Operating Profit KRW 853.0 Billion (YoY +16.1%) / Net Profit KRW 689.0 Billion / Controlling Net Profit KRW 689.0 Billion
- 2026F: Revenue KRW 12.035 Trillion / SG&A KRW 1.300 Trillion / Operating Profit KRW 1.005 Trillion (YoY +17.8%) / Net Profit KRW 857.0 Billion / Controlling Net Profit KRW 857.0 Billion
- 2027F: Revenue KRW 13.008 Trillion / Operating Profit KRW 1.166 Trillion / Net Profit KRW 956.0 Billion / Controlling Net Profit KRW 956.0 Billion
- Key Valuation Multiples (2024A → 2025F → 2026F → 2027F):
- PER: 14.1x → 15.5x → 12.5x → 11.2x
- PBR: 1.1x → 1.1x → 1.1x → 1.0x
- ROE: 8.2% → 7.6% → 8.8% → 9.1%
- EPS: KRW 8,752 → KRW 8,884 → KRW 11,041 → KRW 12,316
- BPS: KRW 113,261 → KRW 120,650 → KRW 130,201 → KRW 141,033
- Quarterly Performance & Outlook:
- 2Q25 Preview: Projected Revenue of KRW 2.758 Trillion (YoY +7.2%, QoQ +0.7%), Operating Profit of KRW 213.1 Billion (YoY +0.7%, QoQ +6.2%, OPM 7.7%), slightly exceeding the market consensus of KRW 208.1 Billion.
- 3Q25 Preview: Projected Revenue of KRW 2.897 Trillion (YoY +11.5%, QoQ +5.0%), Operating Profit of KRW 237.0 Billion (YoY +5.5%, QoQ +11.4%).
🚀 2. [Market Opportunities & Business Outlook]
- Reduced Earnings Volatility & Solid Baseline:
- Reduced dependence on smartphone IT demand and Samsung Electronics, coupled with expanding exposure to automotive and industrial (data centers/servers) segments, stabilizes quarterly operating profit above KRW 200 Billion.
- Despite FX depreciation and tariff concerns in 2Q25 leading to conservative customer production strategies, MLCC and substrate capacity utilization remained resilient in the high-80% range.
- Segment Portfolio Upgrades:
- Component (MLCC): Rising share of automotive and industrial products alongside higher utilization offsets consumer IT sluggishness.
- Package Substrate (FC-BGA): Penetrating AI accelerators and expanding revenue share in servers, data centers, and autonomous driving platforms.
- Optics Solution: Diversifying from smartphones into EVs and autonomous driving cameras; positioned to benefit from Tesla’s robotaxi service deployment.
- Next-Generation Catalysts & Medium-Term Outlook:
- Sampling glass substrates to multiple global clients including Apple, with commercial mass production and revenue recognition anticipated in 2H27.
- Portfolio transformation toward high-value products is projected to drive 2026 operating profit to KRW 1.005 Trillion (YoY +17.8%), marking a return to the KRW 1 Trillion operating profit milestone after four years.
📝 Editor’s Comment (Perspective)
The analyst views Samsung Electro-Mechanics not as a cyclical vendor shaken by sluggish consumer electronics demand and macro headwinds, but as an advanced component enterprise that has established a resilient earnings foundation above KRW 200 Billion per quarter through strategic diversification into AI, automotive, and industrial domains. Greater significance is attached to capacity utilization defense via product mix enhancements and mid-to-long term optionality from glass substrates and robotics driving a return to KRW 1 Trillion in operating profit by 2026.
To verify whether this investment thesis materializes going forward, investors should monitor whether quarterly operating profits consistently hold above KRW 200 Billion through 2Q25 and 3Q25, whether the revenue contribution of FC-BGA substrates dedicated to AI accelerators and data centers continues to climb, and whether client sampling for glass substrates stays on track toward targeted commercial mass production in 2H27. These developments can be tracked through upcoming quarterly earnings releases, official IR materials, and regulatory filings.
📢 Disclaimer & Source
Source: This content has been structured and newly written based on officially disclosed financial facts and data from brokerage reports.
Investment Risk Notice: This content is provided for informational and linguistic reference purposes only. Under no circumstances does it constitute financial advice or a recommendation to buy or sell any specific securities. All investment decisions and financial responsibilities rest entirely with the investor.
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