Brokerage : Hana Securities
Analyst : Minkyung Kim
Investment Rating : BUY (Maintained)
Target Price : KRW 174,000 (Maintained)
Core Momentum : Expanding product mix toward AI infrastructure components and securing Big Tech package substrate awards drive resilient earnings amidst IT set demand uncertainties.
📊 1. [Valuation & Key Financial Metrics]
- Rating & Target Price: BUY (Maintained), 12-Month Target Price of KRW 174,000 maintained
- Annual Earnings Forecasts (K-IFRS Consolidated):
- 2024A: Revenue KRW 10.294 Trillion / Operating Profit KRW 735 Billion / Net Profit KRW 679 Billion
- 2025F: Revenue KRW 11.076 Trillion / Operating Profit KRW 813 Billion / Net Profit KRW 619 Billion
- 2026F: Revenue KRW 11.768 Trillion / Operating Profit KRW 945 Billion / Net Profit KRW 723 Billion
- Key Valuation Multiples (2024A → 2025F → 2026F):
- PER: 14.15x → 18.63x → 15.97x
- PBR: 1.08x → 1.22x → 1.15x
- EV/EBITDA: 5.87x → 6.40x → 5.68x
- ROE: 8.16% → 6.84% → 7.33%
- BPS: KRW 115,152 → KRW 121,704 → KRW 129,262
- Quarterly Performance & Outlook:
- 2Q25 Review: Revenue KRW 2.785 Trillion (YoY +8%, QoQ +2%), Operating Profit KRW 213 Billion (YoY +1%, QoQ +6%, OPM 7.6%). Results slightly exceeded estimates due to a higher proportion of high-value products despite a sharp decline in the KRW/USD exchange rate.
- 3Q25 Preview: Projected Revenue of KRW 2.812 Trillion (YoY +8%, QoQ +1%), Operating Profit of KRW 235 Billion (YoY +2%, QoQ +10%, OPM 8.4%).
🚀 2. [Market Opportunities & Business Outlook]
- Component (MLCC) Entering Peak Season & Structural Mix Shift:
- Favorable mix improvement driven by expanding sales of automotive and industrial (AI server/network) MLCCs.
- 2Q25 utilization rate climbed 10%p QoQ to 90%, while inventory levels remained below 4 weeks (tight relative to the normal 4–6 week range).
- 3Q25 utilization rate is projected to increase by around 5%p QoQ as the division enters its peak season, although mix improvements may be tempered by higher IT set exposure from global smartphone launches.
- Package Substrate (FC-BGA/BGA) Growth Driven by AI:
- 2Q25 FC-BGA revenue grew approximately 20% QoQ on the back of initial revenue recognition for North American Big Tech AI accelerators; BGA benefited from solid ARM processor and memory demand.
- 3Q25 FC-BGA is expected to see slight growth centered on server demand, while BGA is driven by mobile memory and communication modules.
- Secured product awards for server CPUs and AI accelerators with Big Tech customers; ongoing participation in next-generation model development is poised to meaningfully contribute to 2026 earnings.
- Optics & Communication Solution Trends:
- 2Q25 automotive camera module demand increased slightly QoQ, but overall division revenue declined 8% QoQ due to diminishing launch effects from strategic flagship smartphones.
- 3Q25 is projected to see continued growth in automotive shipments, though revenue is estimated to decline 10% QoQ due to softer IT set demand.
📝 Editor’s Comment (Perspective)
The analyst views Samsung Electro-Mechanics not merely as a passive component supplier vulnerable to cyclical consumer IT demand and FX volatility, but as an enterprise successfully transforming its portfolio toward high-value MLCCs and advanced package substrates tailored for AI infrastructure. Greater weight is placed on the company’s technological competitiveness and increasing exposure to low-demand-elasticity AI server components rather than near-term end-market uncertainties.
To verify whether this investment thesis materializes going forward, investors should monitor whether the component division maintains high utilization and disciplined inventory levels (sub-4 weeks) through 3Q25, and whether development awards for Big Tech server CPUs and AI accelerators successfully transition into mass production and structural revenue growth in 2026. These developments can be tracked through upcoming quarterly earnings releases, official IR presentations, and regulatory 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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