Brokerage : DS Investment & Securities
Analyst : Daeho Cho, Jinyoung Kim
Investment Rating : BUY (Maintained)
Target Price : KRW 200,000 (Maintained)
Core Momentum : Expanding product mix across automotive and AI/industrial MLCCs, alongside the 2Q25 shipment ramp-up of AI accelerator FC-BGA substrates, drives structural earnings transformation despite sluggish consumer IT set demand.
📊 1. [Valuation & Key Financial Metrics]
- Rating & Target Price: BUY (Maintained), Target Price maintained at KRW 200,000
- Annual Earnings Forecasts (K-IFRS Consolidated):
- 2024A: Revenue KRW 10.294 Trillion / Operating Profit KRW 735 Billion / Net Profit (Controlling) KRW 679 Billion
- 2025F: Revenue KRW 11.071 Trillion / Operating Profit KRW 882 Billion / Net Profit (Controlling) KRW 750 Billion
- 2026F: Revenue KRW 11.949 Trillion / Operating Profit KRW 1.016 Trillion / Net Profit (Controlling) KRW 862 Billion
- Key Valuation Multiples (2024A → 2025F → 2026F):
- PER: 13.7x → 11.9x → 10.3x
- PBR: 1.1x → 1.0x → 0.9x
- EV/EBITDA: 5.7x → 4.9x → 4.3x
- ROE: 8.2% → 8.3% → 9.0%
- EPS: KRW 9,022 → KRW 10,246 → KRW 11,790
- Operating Margin (OPM): 7.1% → 8.0% → 8.5%
- Quarterly Performance & Outlook:
- 1Q25 Review: Revenue KRW 2.739 Trillion (YoY +4.4%), Operating Profit KRW 200.5 Billion (YoY +11.2%, OPM 7.3%), meeting heightened market consensus (OP KRW 200.4 Billion).
- 2Q25 Preview: Projected Revenue of KRW 2.745 Trillion (YoY +6.9%), Operating Profit of KRW 210.2 Billion (YoY +1.0%).
🚀 2. [Market Opportunities & Business Outlook]
- Component (MLCC) Mix Improvement & High-Value Expansion:
- Top-line and margin improvements driven by China’s trade-in policy, strategic customer flagship launches, pre-tariff pull-in demand, and rising ADAS adoption by Chinese auto OEMs.
- Automotive MLCC revenue share surpassed the mid-20% range in 1Q25 and is projected to expand continuously.
- 1Q25 capacity utilization surpassed the mid-80% level; blended ASP moderated slightly due to higher mobile volume.
- High-capacity MLCC demand expansion driven by ADAS and industrial/AI applications underpins concurrent mid-to-long term growth in Pricing (P) and Volume (Q).
- Package Solution (FC-BGA) AI Shipments & Facility Stabilization:
- Following 1Q25 softness in PC applications, the commercial ramp-up of AI accelerator substrates starting in 2Q25 is set to drive QoQ earnings recovery.
- Stabilization of the Vietnam manufacturing site that commenced operations last year supports an annual FC-BGA revenue run-rate exceeding KRW 1 Trillion.
- 2Q25 Operational Catalysts:
- Despite entering a seasonal low for smartphone components, continuous trade-in policy tailwinds, automotive ADAS adoption, and AI accelerator substrate shipments are projected to support sequential QoQ growth.
📝 Editor’s Comment (Perspective)
The analyst views Samsung Electro-Mechanics not merely as a passive component supplier vulnerable to cyclical consumer mobile demand, but as an advanced electronics hardware manufacturer successfully executing a qualitative business transformation toward automotive and industrial applications. Greater significance is attached to structural portfolio upgrades—highlighted by automotive MLCC sales exceeding the mid-20% threshold and the 2Q25 commercial ramp-up of AI accelerator FC-BGA substrates—rather than broad consumer IT set sluggishness.
To verify whether this investment thesis materializes going forward, investors should monitor whether the quarterly revenue share of automotive MLCCs continues its upward trajectory beyond the mid-20% level, whether AI accelerator FC-BGA shipments translate into measurable QoQ growth for the package division in 2Q25, and whether the stabilized Vietnam production facility enables annual FC-BGA sales to surpass KRW 1 Trillion. These developments can be tracked through upcoming quarterly earnings releases, official 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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