Brokerage : Hana Securities
Analyst : Kim Min-kyung (minkyung.kim@hanafn.com)
Investment Rating : BUY (Maintained)
Target Price : KRW 1,000,000 (Raised)
Core Momentum : Entering a multi-year structural shortage across both MLCCs and FCBGAs driven by AI servers, accelerating customer LTA requests, and closing valuation gaps with global peers via embedded substrates
📊 1. [Valuation & Key Financial Metrics]
- Rating & Target Price: BUY (Maintained) / 12-Month Target Price KRW 1,000,000 (Raised) (Closing price KRW 832,000 as of April 30, 2026; upside potential 20%)
- Valuation Methodology: Applied a Target P/E multiple of 39.5x (2027 peer average across global FCBGA makers Ibiden and Unimicron) to 2027(E) EPS of KRW 24,964
- Key Financial Metrics & Forecast:
- Revenue (KRW): 2024 KRW 10.2941 Trillion → 2025 KRW 11.3145 Trillion → 2026(E) KRW 13.3608 Trillion → 2027(E) KRW 15.6338 Trillion
- Operating Profit (KRW): 2024 KRW 735.0 Billion → 2025 KRW 913.3 Billion → 2026(E) KRW 1.5750 Trillion → 2027(E) KRW 2.3988 Trillion
- Net Profit (Controlling) (KRW): 2024 KRW 679.1 Billion → 2025 KRW 706.1 Billion → 2026(E) KRW 1.3236 Trillion → 2027(E) KRW 1.9372 Trillion
- EPS (KRW): 2024 KRW 8,752 → 2025 KRW 9,099 → 2026(E) KRW 17,057 → 2027(E) KRW 24,964
- Valuation Multiples (PER / PBR / ROE):
- 2024: PER 14.15x, PBR 1.08x, ROE 8.16%
- 2025: PER 28.03x, PBR 2.04x, ROE 7.70%
- 2026(E): PER 48.78x, PBR 5.96x, ROE 13.09%
- 2027(E): PER 33.33x, PBR 5.13x, ROE 16.75%
- 1Q 2026 Performance (1Q26):
- Revenue KRW 3.2091 Trillion (+17% YoY, +11% QoQ), Operating Profit KRW 280.6 Billion (+40% YoY, +17% QoQ).
- Operating profit beat Hana Securities estimates despite recognizing KRW 71.4 Billion in one-off expenses, driven by high-value product mix improvements across MLCCs and FCBGAs.
🚀 2. [Market Opportunities & Business Outlook]
- MLCC Division (Surging LTA Inquiries & Capacity Cannibalization):
- Supply Bottlenecks & LTAs: Heightened procurement concerns across client segments are driving an influx of LTA requests. Prioritizing process-heavy AI server MLCCs is directly cannibalizing standard IT MLCC capacity.
- Duopoly Pricing Power: Datacenter clients prioritize supply stability over pricing, cementing long-term pricing power for the Murata-SEMCO duopoly.
- Capacity Expansion: Annual MLCC production capacity planned to expand by roughly 10% YoY.
- FCBGA & Substrates (Accelerated Ramp-up & Ongoing Price Hikes):
- Customer Expansion: Incremental volume requests from existing clients and accelerated mass-production schedules for new customers are steepening the earnings growth curve.
- Pricing & Mix: Tight supply conditions underpin ongoing contract price negotiations throughout the year. 1Q26 FCBGA sales grew over 20% QoQ, supported by price pass-through of raw material cost increases in BGA lines.
- Embedded Innovation: Leveraging proprietary MLCC technology to accelerate market share gains in next-gen embedded substrates, supported by greenfield and debottlenecking investments.
- Optics & Long-Term Growth Verticals:
- Optics division delivered solid QoQ growth despite smartphone market softness, supported by new flagship rollouts at key accounts.
- Long-term structural demand expansion emerging across satellite communications and humanoid robotics hardware platforms.
📝 Editor’s Comment (Perspective)
The analyst views Samsung Electro-Mechanics not merely as a cyclical passive vendor, but as an essential AI hardware infrastructure leader powered by its dual growth engines—MLCCs and FCBGA substrates (“Left Azure Dragon, Right White Tiger”). This perspective looks past short-term quarterly one-offs (KRW 71.4 Billion) to highlight structural inflection points: an influx of customer LTAs, extensive capacity cannibalization toward AI-grade components, and the narrowing valuation discount against global peers (Ibiden, Unimicron) driven by embedded packaging advancements (Target P/E 39.5x).
To evaluate whether this investment thesis unfolds as anticipated, key verification checkpoints include sequential quarterly margin expansion post-1Q26 one-offs, the formalization of customer LTAs alongside execution of the ~10% MLCC capacity expansion, accelerated commercial delivery timelines for new FCBGA customer accounts, and the revenue ramp-up of next-generation embedded substrates. Progress on these fronts can be tracked via upcoming quarterly earnings announcements, official investor relations disclosures, and periodic 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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