Brokerage : Daishin Securities
Analyst : Kang-ho Park
Investment Rating : BUY (Maintained)
Target Price : KRW 200,000 (Maintained, 6M Target Price)
Core Momentum : Driven by >90% MLCC fab utilization and mix-led margin gains in 3Q24, with earnings accelerating into 2025 (+28.9% YoY Operating Profit) powered by the commencement of FC-BGA production for AI applications starting 4Q24.
📊 1. [Valuation & Key Financial Metrics]
- Investment Rating & Target Price: BUY (Maintained) / KRW 200,000 (Maintained, 6M Target Price)
- Current Share Price (As of Sep 23, 2024): KRW 136,600
- Market Capitalization: KRW 10.39T
- Key Financial Metrics & Forecast:
- Revenue: 2023A KRW 8.91T → 2024F KRW 10.45T → 2025F KRW 11.40T (+9.1% YoY) → 2026F KRW 12.53T
- Operating Profit: 2023A KRW 639.0B → 2024F KRW 835.0B (OPM 8.0%) → 2025F KRW 1.08T (Table: KRW 1,076.0B, +28.9% YoY, OPM 9.4%) → 2026F KRW 1.38T (Table: KRW 1,379.0B, OPM 11.0%)
- Net Profit (Controlling): 2023A KRW 423.0B → 2024F KRW 743.0B → 2025F KRW 868.0B → 2026F KRW 1.11T (Table: KRW 1,107.0B)
- EPS: 2023A KRW 5,450 → 2024F KRW 9,569 → 2025F KRW 11,185 → 2026F KRW 14,268
- PER: 2023A 28.1x → 2024F 13.9x → 2025F 11.9x → 2026F 9.3x
- PBR: 2023A 1.5x → 2024F 1.2x → 2025F 1.1x → 2026F 1.0x
- ROE: 2023A 5.5% → 2024F 9.0% → 2025F 9.7% → 2026F 11.1%
- 3Q24 Earnings Preview: Projected Revenue of KRW 2.681T (Text: ~KRW 2.68T, +3.9% YoY, +13.6% QoQ), Operating Profit of KRW 238.5B (Table: KRW 239.0B, +14.6% YoY, +29.6% QoQ, OPM 8.9%). Matches Daishin’s prior forecast (KRW 241.0B) while slightly trailing market consensus (KRW 252.5B), with key focus on robust sequential and annual margin expansion.
- 4Q24 Earnings Forecast: Projected Revenue of KRW 2.568T (+11.3% YoY, -4.2% QoQ), Operating Profit of KRW 208.0B (+88.1% YoY, -12.9% QoQ). Strong YoY growth is maintained despite typical 4Q seasonality.
🚀 2. [Market Opportunities & Business Outlook]
- Component Division (MLCC): 3Q24 MLCC revenue projected at KRW 1.18T (+19% YoY). Fab utilization is operating above normal levels in the low-90% range post-2023 destocking, driving profitability via product mix improvements. Automotive and industrial demand along with market share gains compensate for weak consumer IT recovery. AI feature integration is set to drive high-capacitance content and blended ASP expansion in 2025.
- Package Solution Division (FC-BGA): Despite sluggish PC demand, the commencement of FC-BGA production for AI applications starting 4Q24 will drive fast revenue growth and margin recovery into 2025. Rising sales in AI-oriented FC-BGA serve as the primary catalyst.
- 2025 Set Replacement Cycle: Broad replacement demand for smartphones, PCs, and TVs combined with AI adoption will accelerate passive component upgrades across device categories.
📝 Editor’s Comment (Perspective)
The analyst views Samsung Electro-Mechanics not through the lens of a minor 3Q consensus miss, but as an advanced electronics hardware manufacturer demonstrating robust fundamental direction through solid sequential and YoY growth alongside market share gains. Beyond 4Q seasonal off-peak moderation, the investment thesis centers on profitability leverage driven by low-90% MLCC fab utilization and mix enrichment, combined with the launch of FC-BGA production for AI applications starting 4Q24, propelling 2025 operating profit to KRW 1.08T (+28.9% YoY).
To verify whether this investment thesis progresses according to expectations, key tracking points include the attainment of the 2025 full-year operating profit forecast (KRW 1.076T, +28.9% YoY), maintaining >90% MLCC fab utilization and expanding high-value automotive/industrial mix, commercial execution and revenue ramp of FC-BGA production for AI applications starting 4Q24, and blended ASP gains driven by the 2025 IT device replacement cycle. These developments can be monitored through upcoming quarterly financial announcements, official company IR presentations, and regulatory filings.
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