Brokerage : Kiwoom Securities
Analyst : So-won Kim
Investment Rating : BUY (Maintain)
Target Price : KRW 180,000 (Maintained)
Core Momentum : Driving earnings recovery and structural growth through expanding AI server/device demand for high-value MLCCs and FC-BGA, supported by China’s trade-in consumer subsidies.
📊 1. [Valuation & Key Financial Metrics]
- Investment Rating & Target Price: BUY (Maintain) / KRW 180,000 (Maintained)
- Current Share Price (As of Jan 24, 2025): KRW 128,100
- Market Capitalization: KRW 9.57T
- Key Financial Metrics & Forecast:
- Revenue: 2023A KRW 8.89T → 2024F KRW 10.29T → 2025F KRW 11.27T
- Operating Profit: 2023A KRW 660.5B → 2024F KRW 735.0B (OPM 7.1%) → 2025F KRW 921.4B (+25% YoY, OPM 8.2%)
- Net Profit: 2023A KRW 450.5B → 2024F KRW 703.1B → 2025F KRW 788.2B
- Net Profit (Controlling): 2023A KRW 423.0B → 2024F KRW 660.2B → 2025F KRW 740.0B
- EPS: 2023A KRW 5,450 → 2024F KRW 8,507 (+56.1% YoY) → 2025F KRW 9,536 (+12.1% YoY)
- PER: 2023A 28.1x → 2024F 14.6x → 2025F 13.4x
- PBR: 2023A 1.51x → 2024F 1.15x → 2025F 1.10x
- ROE: 2023A 5.5% → 2024F 8.1% → 2025F 8.5%
- 4Q24 Earnings Review: Revenue of KRW 2.49T (-5% QoQ, +8% YoY), Operating Profit of KRW 115.0B (-49% QoQ, +1% YoY), missing market consensus (KRW 140.8B) due to year-end inventory destocking. However, Blended ASP rose slightly supported by automotive MLCC growth (>30% YoY in 2024).
- 1Q25 Earnings Outlook: Projected Revenue of KRW 2.66T (+7% QoQ, +2% YoY), Operating Profit of KRW 197.2B (+71% QoQ, +7% YoY), aligning with market consensus (KRW 197.7B).
🚀 2. [Market Opportunities & Business Outlook]
- Component Division (MLCC): Driven by new AI server deployments and rising MLCC content per box, total server MLCC revenue share is projected to expand from 12–13% in 2024 to the low-20% range in 2025, within which AI server MLCC share is expected to rise from 6% in 2024 to 10% in 2025. Solid support continues from the Galaxy S25 launch and automotive MLCC demand.
- Package Substrate Division: 4Q24 FC-BGA revenue grew +16% QoQ and +62% YoY on strong demand for server CPU substrates, outperforming the broader oversupplied packaging market. AI accelerator FC-BGA supply is expected to accelerate starting in 2Q25 after 1Q seasonality.
- New Product Catalysts: Commercial supply of silicon capacitors for AI servers scheduled to commence in 2H25.
- China Policy Tailwinds: Inclusion of smartphones, tablets, and smartwatches in China’s trade-in subsidy policy is expected to lift order volumes for MLCCs and camera modules.
📝 Editor’s Comment (Perspective)
The analyst evaluates Samsung Electro-Mechanics not simply as a passive component supplier vulnerable to soft consumer IT markets, but as an advanced electronics hardware manufacturer strengthening its product mix and pricing power via AI infrastructure and automotive solutions. The core thesis emphasizes structural profit expansion across 2025 driven by the rising revenue portion of high-value AI components (server MLCCs, FC-BGA, and silicon capacitors) along with policy-driven consumer replenishment.
To verify whether this investment thesis materializes, key tracking points include 1Q25 operating profit meeting consensus expectations (KRW 197.2B), total server MLCCs reaching the low-20% range (with AI server MLCCs reaching 10%), the ramp-up of AI accelerator FC-BGA deliveries in 2Q25, the commercial rollout of AI server silicon capacitors in 2H25, and tangible volume recovery in Chinese smartphone components. These factors can be monitored through upcoming quarterly financial announcements, official company IR releases, and regulatory filings.
📢 Disclaimer & Source
Source: This content has been structured and newly written based on officially disclosed financial facts and data from brokerage reports.
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