Brokerage : IBK Investment & Securities
Analyst : Unho Kim
Investment Rating : BUY (Maintained)
Target Price : KRW 170,000 (Maintained)
Core Momentum : Steady expansion of Non-IT MLCC revenue share with new client onboarding, coupled with package substrate mix transition from mobile/PC to high-value server/automotive applications, supports structural earnings momentum.
📊 1. [Valuation & Key Financial Metrics]
- Rating & Target Price: BUY (Maintained), Target Price maintained at KRW 170,000
- EPS Forecast Revisions:
- 2025F EPS revised from KRW 10,589 to KRW 9,669
- 2026F EPS revised from KRW 10,722 to KRW 10,585
- 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 11.258 Trillion / Operating Profit KRW 953 Billion / Net Profit (Controlling) KRW 750 Billion
- 2026F: Revenue KRW 11.963 Trillion / Operating Profit KRW 1.057 Trillion / Net Profit (Controlling) KRW 821 Billion
- 2027F: Revenue KRW 12.924 Trillion / Operating Profit KRW 1.123 Trillion / Net Profit (Controlling) KRW 850 Billion
- Key Valuation Multiples (2024A → 2025F → 2026F → 2027F):
- PER: 14.1x → 12.5x → 11.5x → 11.1x
- PBR: 1.1x → 1.0x → 0.9x → 0.9x
- EV/EBITDA: 5.9x → 4.9x → 4.1x → 3.8x
- ROE: 8.2% → 8.3% → 8.4% → 8.2%
- EPS: KRW 8,752 → KRW 9,669 → KRW 10,585 → KRW 10,958
- Operating Margin (OPM): 7.1% → 8.5% → 8.8% → 8.7%
- Quarterly Performance & Outlook:
- 1Q25 Review: Revenue KRW 2.739 Trillion (QoQ +9.9%), Operating Profit KRW 200.5 Billion (QoQ +74.3%). Driven by solid growth in Optics and Components (QoQ +12%), operating profit across non-package divisions more than doubled QoQ (package substrates softened due to lower FC-BGA revenue).
- 2Q25 Preview: Projected Revenue of KRW 2.758 Trillion (similar QoQ), Operating Profit of KRW 216.6 Billion (QoQ +8.0%). Despite seasonal optics softness, non-optics divisions are expected to post ~8% QoQ revenue growth to drive sequential profit expansion.
🚀 2. [Market Opportunities & Business Outlook]
- Component (MLCC) Non-IT Share Expansion & New Client Inflow:
- 1Q25 Component division revenue increased +12% QoQ, leading the company’s earnings delivery.
- Non-IT revenue share within MLCC continues to rise steadily; securing new accounts establishes a sustainable long-term growth foundation.
- Package Substrates Portfolio Transition to Server & Automotive:
- Following a soft 1Q25 caused by lower FC-BGA sales, the package substrate product mix is actively shifting from consumer mobile/PC toward high-value server and automotive applications.
- Expanding exposure to server and automotive markets is projected to drive structural profitability improvements for the package division.
- Optics Solutions Dynamics:
- While optics led top-line growth in 1Q25, the division faces a seasonal slowdown in 2Q25 due to volume contraction and product mix shifts.
- Sustained Sequential Growth in 2Q25:
- Offsetting optical seasonality, non-optics divisions are forecast to grow by ~8% QoQ, supporting a sequential operating profit improvement to KRW 216.6 Billion (QoQ +8.0%).
📝 Editor’s Comment (Perspective)
The analyst views Samsung Electro-Mechanics not as a component maker exposed to optical seasonality, but as an advanced electronics hardware player reinforcing its long-term baseline profitability through steady Non-IT MLCC expansion and a strategic mix shift in package substrates toward servers and automotive electronics. Greater emphasis is placed on new client acquisition in MLCC and the qualitative transition of FC-BGA substrates into high-margin enterprise computing rather than near-term smartphone camera seasonality.
To verify whether this investment thesis materializes going forward, investors should monitor whether non-optics business divisions achieve ~8% QoQ revenue growth to support the projected 2Q25 operating profit of KRW 216.6 Billion, whether the Non-IT revenue proportion in MLCC continues its upward trend alongside new account wins, and whether the package substrate division effectively lifts margins by transitioning its product mix toward server and automotive applications. 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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