Brokerage : Hana Securities
Analyst : Rok-ho Kim, RA: Kang-ho Park
Investment Rating : BUY (Maintained)
Target Price : KRW 200,000 (Maintained, 12M Target Price)
Core Momentum : Proving structural earnings resilience through expanding automotive/industrial MLCC mix up to 48%, supported by consumer sentiment recovery from China’s smartphone subsidies.
📊 1. [Valuation & Key Financial Metrics]
- Investment Rating & Target Price: BUY (Maintained) / KRW 200,000 (Maintained, based on 12-month forward earnings)
- Current Share Price (As of Dec 11, 2024): KRW 119,300
- Key Financial Metrics & Forecast:
- Revenue: 2023A KRW 8.91T → 2024F KRW 10.19T → 2025F KRW 10.94T
- Operating Profit: 2023A KRW 639.4B → 2024F KRW 764.1B (+20% YoY) → 2025F KRW 907.4B (+19% YoY)
- Net Profit: 2023A KRW 423.0B → 2024F KRW 551.8B → 2025F KRW 593.7B
- EPS: 2023A KRW 5,450 → 2024F KRW 7,111 (+30.48% YoY) → 2025F KRW 7,651 (+7.59% YoY)
- PER: 2023A 28.11x → 2024F 16.78x → 2025F 15.59x
- PBR: 2023A 1.49x → 2024F 1.08x → 2025F 1.02x
- ROE: 2023A 5.50% → 2024F 6.78% → 2025F 6.83%
- BPS: 2023A KRW 103,020 → 2024F KRW 110,571 → 2025F KRW 117,100
- DPS: 2023A KRW 1,150 → 2024F KRW 1,150 → 2025F KRW 1,150
- 4Q24 Earnings Preview: Projected Revenue of KRW 2.37T (+3% YoY, -9% QoQ) and Operating Profit of KRW 150.8B (+37% YoY, -33% QoQ). Revenue and operating profit estimates were revised down by 2% and 11% respectively due to soft demand for smartphones/PCs and weakness in FCCSP, memory substrates, and PC FCBGA. A favorable KRW/USD exchange rate (>KRW 1,400 vs. baseline KRW 1,380) offers potential upside.
🚀 2. [Market Opportunities & Business Outlook]
- Portfolio Mix Transformation: Combined revenue share of automotive and industrial MLCCs is projected to expand significantly from 27% in 2022 to 42% in 2024 and 48% in 2025. Robust demand for AI and general servers/data centers underpins YoY profit growth despite broader IT sluggishness.
- Package Solutions: 4Q24 results for FCCSP and memory substrates were weaker than initially expected, and PC FCBGA is also estimated to miss previous forecasts.
- China Policy Catalysts: Expansion of trade-in subsidies and consumption vouchers to include smartphones, tablets, and smart devices across key Chinese regions (Hangzhou, Jiangsu, Guizhou, Shenzhen) is expected to accelerate channel destocking and support sentiment recovery.
📝 Editor’s Comment (Perspective)
The analyst views Samsung Electro-Mechanics not as a generic IT component supplier vulnerable to smartphone demand softness, but as an advanced electronics hardware manufacturer successfully proving business mix transformation—evidenced by the automotive and industrial MLCC portion surging toward 48% in 2025. The core perspective looks beyond short-term 4Q estimate adjustments, placing greater weight on resilient AI/data center server demand and the consumer stimulus in China as catalysts for sentiment and valuation re-rating.
To assess whether this investment thesis unfolds as anticipated, key verification points include whether the combined automotive and industrial MLCC revenue share reaches 48% in 2025, the persistence of server/data center order strength, tangible demand pickup from China’s trade-in subsidies, and the company’s ability to provide YoY profit growth guidance in 1Q25 despite IT seasonality. These developments can be monitored through upcoming quarterly financial announcements, official company IR releases, 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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