Brokerage : IBK Securities
Analyst : Kim Woon-ho
Investment Rating : BUY (Maintained)
Target Price : KRW 600,000 (Raised)
Core Momentum : Earnings growth outlook driven by expanding component supply shortages, FC-BGA price hikes, and rising probability of MLCC price increases amid surging AI demand
📊 1. [Valuation & Key Financial Metrics]
- Investment Rating & Target Price: BUY maintained; Target Price raised from KRW 330,000 to KRW 600,000 (incorporating overseas substrate peer valuations).
- EPS Forecast Revisions:
- 2026F EPS: KRW 13,130 (vs. previous KRW 13,169; +44.3% YoY)
- 2027F EPS: KRW 19,266 (raised from KRW 11,296; +46.7% YoY)
- 1Q26 Earnings Forecast:
- Revenue: KRW 3.165 Trillion (+9.1% QoQ)
- Operating Profit: KRW 277.9 Billion (+16.0% QoQ)
- Highlights: Broad-based sequential top-line growth across all divisions supported by seasonality and price increases in select lines (substantially beating estimates when adjusting for one-off costs).
- Annual Financial Projections (2026F – 2028F):
- 2026F: Revenue KRW 12.772 Trillion / Operating Profit KRW 1.482 Trillion (+65%+ YoY) / Controlling Net Profit KRW 1.019 Trillion
- 2027F: Revenue KRW 13.983 Trillion / Operating Profit KRW 1.989 Trillion / Controlling Net Profit KRW 1.495 Trillion
- 2028F: Revenue KRW 15.889 Trillion / Operating Profit KRW 2.336 Trillion / Controlling Net Profit KRW 1.726 Trillion
- Key Financial Multiples (2026F):
- Operating Margin (OPM): 11.6%
- Net Margin: 9.1%
- ROE: 10.2%
- P/E: 34.7x
- P/B: 3.4x
- EV/EBITDA: 13.7x
- Dividend Yield: 0.5%
🚀 2. [Market Opportunities & Business Outlook]
- Component Shortages & Pricing Dynamics:
- Surging AI-related demand is tightening industry supply capacity, fostering conditions for application-specific price increases.
- FC-BGA: Profitability is expanding significantly, driven by realized product price increases.
- MLCC: As the company’s largest revenue contributor, the probability of an MLCC price increase is viewed as rising, serving as a critical catalyst for future earnings revisions.
- Segment Product Mix Improvement:
- Component Division: The share of Non-IT MLCC continues to trend upward, driving structural profitability.
- Package Solutions: Expanding exposures to server and AI ASIC substrates are expected to drive concurrent improvements in revenue and profitability.
- Earnings Trajectory:
- Operating profit growth beginning in 1Q26 is projected to persist throughout the year, with 2026 annual operating profit expected to increase by more than 65% YoY.
📝 Editor’s Comment (Perspective)
The analyst views Samsung Electro-Mechanics not merely as a passive component supplier bound by consumer IT hardware cycles, but as a primary hardware beneficiary capturing pricing leverage amid widespread AI-driven component shortages. The analytical perspective places greater strategic significance on the realized profitability gains from FC-BGA price hikes, increasing upside potential for MLCC pricing, and the structural mix upgrade toward server/AI ASIC and Non-IT applications rather than short-term one-off cost impacts.
To assess whether this investment thesis continues to materialize, key tracking points include the sustainability of FC-BGA pricing gains, the actual timing and realization of broad-based MLCC price increases, and the extent to which expanding Non-IT MLCC and AI ASIC exposures translate into achieving projected annual operating profit (KRW 1.48 Trillion+). These variables can be verified through upcoming quarterly earnings releases, official company IR presentations, periodic regulatory filings (quarterly and annual reports), and DART disclosures.
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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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