Brokerage : Hana Securities
Analyst : Minkyung Kim
Investment Rating : BUY (Maintained)
Target Price : KRW 174,000 (Maintained)
Core Momentum : Product mix improvement from expanding AI server/automotive MLCCs and full-scale shipments of larger, higher-layer AI accelerator FC-BGA substrates drive structural upward earnings trajectory despite FX headwinds.
📊 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 11.124 Trillion / Operating Profit KRW 832 Billion / Net Profit KRW 674 Billion
- 2026F: Revenue KRW 11.897 Trillion / Operating Profit KRW 1.066 Trillion / Net Profit KRW 855 Billion
- Key Valuation Multiples (2024A → 2025F → 2026F):
- PER: 14.15x → 15.96x → 12.58x
- PBR: 1.08x → 1.13x → 1.05x
- EV/EBITDA: 5.87x → 5.81x → 4.81x
- ROE: 8.16% → 7.43% → 8.80%
- BPS: KRW 115,152 → KRW 122,414 → KRW 131,679
- 2Q25 Quarterly Earnings Forecast (Preview):
- Revenue projected at KRW 2.732 Trillion (YoY +6%, QoQ -0.2%), Operating Profit at KRW 206.7 Billion (YoY -0.7%, QoQ +3%).
- Operating profit was revised down by 5% due to KRW/USD exchange rate declines, though shipment volumes remain fully in line with prior estimates.
🚀 2. [Market Opportunities & Business Outlook]
- Component (MLCC) Mix Optimization & Utilization Recovery:
- Expanding shipments for AI servers and Chinese ADAS adoption are driving high-value MLCC mix improvements.
- 2Q25 MLCC utilization improved QoQ to the high-80% range while maintaining healthy inventory levels.
- China’s upcoming fiscal stimulus is expected to support resilient regional IT demand in 2H25, offering potential for further capacity utilization gains.
- Package Substrates (FC-BGA/BGA) Catalysts & Industry Balance:
- 2Q25 FC-BGA revenue is estimated to grow over 10% QoQ as volume shipments for AI accelerators ramp up.
- AI accelerator FC-BGA substrates feature approximately 4x the area and 1.5–2x higher layer counts compared to PC substrates, directly driving ASP expansion.
- Area expansion and higher layer complexity introduce capacity loss across the industry, accelerating an overall supply-demand balance improvement in FC-BGA.
- Following the 2Q25 AI accelerator shipment ramp, potential for securing additional global accounts in 2H25 remains high.
- Optics & Communication Solutions:
- Although the division is experiencing seasonal softness in revenue and operating profit QoQ, shipments for automotive camera modules have demonstrated a clear rebound.
📝 Editor’s Comment (Perspective)
The analyst views Samsung Electro-Mechanics not as a cyclical component maker vulnerable to foreign exchange fluctuations and consumer IT set volatility, but as an advanced electronics player establishing a distinct structural uptrend through an expanding product mix in AI servers and automotive applications. Greater significance is attached to the commercial ramp-up of higher-layer, large-area AI accelerator FC-BGA substrates and MLCC portfolio enhancements rather than near-term currency adjustments.
To verify whether this investment thesis materializes going forward, investors should monitor whether MLCC capacity utilization advances further from the high-80% level alongside stable inventory discipline, whether the ASP expansion driven by larger and higher-layer AI accelerator substrates translates into substantial package division profitability gains, and whether the company secures additional Tier-1 customers for its FC-BGA business in 2H25. These developments can be tracked through upcoming quarterly earnings releases, official IR materials, and regulatory filings.
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