Brokerage : IBK Securities
Analyst : Un-oh Kim
Investment Rating : BUY (Maintained)
Target Price : KRW 190,000 (Raised)
Core Momentum : An earlier-than-expected earnings rebound driven by expanding non-IT MLCC share and substrate growth across server, network, and automotive sectors is projected to sustain quarterly earnings momentum throughout 2024.
📊 1. [Valuation & Key Financial Metrics]
- Target Price & Rating: Target Price raised to KRW 190,000, Rating maintained at BUY
- Stock Data (As of April 29, 2024): Current Price KRW 151,300, Market Capitalization KRW 11.52 Trillion, Foreign Ownership 31.5%
- Key Financial Forecasts (2023 → 2024F → 2025F):
- Revenue: KRW 8.91 Trillion → KRW 10.20 Trillion → KRW 11.43 Trillion
- Operating Profit: KRW 639.0 Billion → KRW 858.0 Billion → KRW 976.0 Billion
- Net Profit (Controlling): KRW 423.0 Billion → KRW 668.0 Billion → KRW 771.0 Billion
- EPS: KRW 5,450 → KRW 8,609 → KRW 9,940 (YoY Growth: -56.9% → +57.9% → +15.5%)
- PER / PBR: 28.1x / 1.5x → 17.6x / 1.4x → 15.2x / 1.3x
- Operating Margin: 7.2% → 8.4% → 8.5%
- ROE: 5.5% → 8.2% → 8.8%
🚀 2. [Market Opportunities & Business Outlook]
- Q1 2024 Performance Review:
- Consolidated revenue reached KRW 2.62 Trillion (+13.8% QoQ) and operating profit surged to KRW 180.3 Billion (+63.3% QoQ), exceeding expectations with a sharper-than-projected turnaround.
- Segment revenue moved -3.3% QoQ for Package Solution, +4.9% QoQ for Component (operating profit +70%+ QoQ), and +32.1% QoQ for Optics & Communication (operating profit nearly tripled).
- Q2 2024 Outlook:
- Revenue is forecast at KRW 2.40 Trillion (-8.5% QoQ) and operating profit at KRW 210.1 Billion (+16.6% QoQ).
- Despite seasonal softness in Optics & Communication (revenue -28.8% QoQ), sequential improvements in Component (+10.1% QoQ) and Package Solution (+2.9% QoQ) will drive company-wide profit expansion.
- Medium-Term Drivers & Product Mix:
- Non-IT revenue contribution within MLCC continues to trend upward alongside new tier-1 customer acquisitions.
- Expanding AI-related hardware exposure in H2 and sustained growth in server, network, and automotive packaging substrates are expected to offset broad IT set softness.
📝 Editor’s Comment (Perspective)
The analyst views Samsung Electro-Mechanics not as a passive component supplier constrained by sluggish consumer IT demand, but as an enterprise establishing a steady upward quarterly earnings trajectory backed by expanding non-IT MLCC exposure and high-value packaging substrate growth. The overarching perspective places greater significance on the structural margin recovery in the Component division and secular expansion into server and automotive segments than on short-term quarterly volatility in mobile camera modules.
To evaluate the ongoing progression of this investment thesis, verification should focus on whether the Component division delivers its projected double-digit top-line growth (+10.1% QoQ) to support Q2 operating profit above KRW 210.0 Billion, whether the share of non-IT MLCC revenue sustains its upward trajectory alongside new client wins, and whether substrate revenue from server and network applications continues to expand in the second half. These operational milestones can be monitored through upcoming quarterly earnings releases, official investor relations presentations, 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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