Brokerage : Kiwoom Securities
Analyst : Min-gyu Kwon
Investment Rating : BUY (Maintained)
Target Price : KRW 2,800,000 (Maintained)
Core Momentum : Arrival of a structural price (P) up-cycle driven by rapid transition toward non-commodity B2B portfolios and severe supply shortages in high-capacitance MLCCs and FC-BGAs
📊 1. [Valuation & Key Financial Metrics]
- Rating & Target Price: BUY (Maintained) / Target Price KRW 2,800,000 (Maintained) (Closing price KRW 879,000 as of July 30, 2026)
- Stock & Valuation Context: While the stock pulled back 61% from its peak, 12MF EPS surged 113% since early this year, indicating an excessive valuation discount against expanding earnings power
- Key Financial Metrics & Forecast:
- Revenue (KRW): 2025 KRW 11.3145 Trillion → 2026(E) KRW 14.8355 Trillion → 2027(E) KRW 20.5196 Trillion → 2028(E) KRW 27.8546 Trillion
- Operating Profit (KRW): 2025 KRW 913.3 Billion → 2026(E) KRW 2.0965 Trillion → 2027(E) KRW 4.0475 Trillion → 2028(E) KRW 6.0598 Trillion
- Operating Profit Margin (OPM): 2025 8.1% → 2026(E) 14.1% → 2027(E) 19.7% → 2028(E) 21.8%
- Net Profit (Controlling) (KRW): 2025 KRW 706.1 Billion → 2026(E) KRW 1.6324 Trillion → 2027(E) KRW 3.1207 Trillion → 2028(E) KRW 4.6928 Trillion
- EPS (KRW): 2025 KRW 9,099 → 2026(E) KRW 21,036 → 2027(E) KRW 40,215 → 2028(E) KRW 60,473
- Valuation Multiples (PER / PBR / ROE):
- 2025: PER 28.0x, PBR 2.07x, ROE 7.7%
- 2026(E): PER 94.6x, PBR 13.66x, ROE 15.7%
- 2027(E): PER 49.5x, PBR 10.70x, ROE 24.3%
- 2028(E): PER 32.9x, PBR 8.07x, ROE 28.0%
- 2Q 2026 Results (2Q26):
- Revenue: KRW 3.4573 Trillion (+24% YoY)
- Operating Profit: KRW 440.4 Billion (+107% YoY, OPM 12.7%, beating consensus of KRW 406.1 Billion)
🚀 2. [Market Opportunities & Business Outlook]
- Structural Shift Toward Non-Commodity B2B Portfolios:
- Data Center MLCC Share: Rose steeply from 14% in 1Q26 to 19% in 2Q26.
- Server FC-BGA Share: Increased from 49% in 1Q26 to 57% in 2Q26, accelerating the portfolio pivot from commodity products toward high-value B2B components.
- MLCC Segment (Acute Shortages & Price Cycle):
- Supply Constraints: Only two global manufacturers (including Samsung Electro-Mechanics) can supply the most supply-constrained 1005 47㎌ MLCCs, worsening bottleneck conditions amid surging hyperscaler demand.
- LTA Pipeline & Pricing: Finalized LTAs with 10 companies, with negotiations underway for even larger subsequent contracts. Full-scale price increases for B2B volumes are expected to take effect starting in 3Q26.
- FC-BGA Segment (95% Utilization & Price Expansion):
- Profitability & Product Mix: New server products and new client deliveries in 2H26 will concurrently drive product mix improvements and ASP expansion.
- Capacity Reallocation & Expansion: Considering reducing BGA capacity to secure additional FC-BGA capacity; ongoing discussions for customer-supported capacity expansion with global top-tier AI players.
📝 Editor’s Comment (Perspective)
The analyst views Samsung Electro-Mechanics not merely as a conventional commodity component maker, but as an essential high-value B2B platform undergoing a transformation analogous to the memory industry’s HBM cycle. This perspective looks beyond short-term share price pullbacks to emphasize the structural arrival of a price (P) up-cycle, underpinned by severe duopolistic shortages in 1005 47㎌ MLCCs and maximum capacity utilization across FC-BGA lines.
To assess whether this investment thesis unfolds as anticipated, key verification checkpoints include the magnitude of price increases realized across B2B MLCC contracts starting in 3Q26, the execution of additional large-scale LTAs, and strategic decisions regarding the conversion of BGA capacity into FC-BGA alongside client-backed expansion plans. Progress on these factors can be monitored through upcoming quarterly earnings releases, official IR materials, and periodic 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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