Brokerage : SK Securities
Analyst : Hyoung-wou Park, Min-gyu Kwon
Investment Rating : BUY (Maintain)
Target Price : KRW 182,000 (Maintain)
Core Momentum : Structural mix improvement driven by on-device AI and expanding automotive/server demand, underpinning an earnings recovery inflection from 1Q24
📊 1. [Valuation & Key Financial Metrics]
Target Price & Valuation Basis
- Maintained BUY rating with a Target Price of KRW 182,000
- Upside potential of 32.9% based on closing price of KRW 136,900 (March 13, 2024)
- Valuation attractive with 2024F P/B at 1.26x based on projected BPS
Financial Forecast & Key Metrics (Consolidated)
- 2022: Revenue KRW 9.425T, Operating Profit KRW 1.183T, Net Profit (Controlling) KRW 981B, EPS KRW 13,012, P/E 10.0x, P/B 1.3x, ROE 13.8%
- 2023(E): Revenue KRW 8.909T, Operating Profit KRW 639B, Net Profit (Controlling) KRW 422B, EPS KRW 5,511, P/E 27.8x, P/B 1.5x, ROE 5.5%
- 2024(E): Revenue KRW 9.741T, Operating Profit KRW 880B, Net Profit (Controlling) KRW 530B, EPS KRW 6,827, P/E 19.9x, P/B 1.2x, ROE 6.5%
- 2025(E): Revenue KRW 10.309T, Operating Profit KRW 1.222T, Net Profit (Controlling) KRW 751B, EPS KRW 9,681, P/E 14.0x, P/B 1.2x, ROE 8.7%
1Q24 Quarterly Outlook
- 1Q24 Operating profit estimated at KRW 174.4B (+25% YoY), surpassing the market consensus of KRW 160.1B
🚀 2. [Market Opportunities & Business Outlook]
On-Device AI Proliferation Expanding MLCC Content & Capacitance
- Smartphones: While unit count growth is limited in recent AI smartphones, required capacitance per device has increased
- AI PCs: Projected to drive an increase of over 10% in MLCC unit content and more than 50% in total capacitance compared to legacy PCs
Portfolio Transformation toward AI, Servers, and Automotive
- Smartphone exposure in total MLCC sales: Projected to decline from historical 40–50%+ levels to the 30% range by 2025
- Automotive MLCC demand continues to rise despite broader EV market concerns, with automotive revenue contribution expected to rebound in 1Q24
- MLCC content per server continues to expand alongside server spec upgrades and AI accelerator proliferation
Segment Trends & Short-Term Shipment Environment
- 1Q24 MLCC shipment volume is projected to grow +3% QoQ, centered on high-end product lines, with blended ASP assumed to increase by +4%
- Benefiting from key flagship smartphone launch effects
- FC-BGA substrate segment remains subdued, though outperforming global peers (Japan, Taiwan, Austria)
- Broader end-set demand recovery remains gradual, with visible demand inflections expected by late 2Q24 or beyond
📝 Editor’s Comment (Perspective)
The analyst views Samsung Electro-Mechanics as a transforming component supplier diversifying away from smartphone reliance toward high-value growth pillars including on-device AI, AI servers, and automotive electronics. The core perspective focuses on the structural direction of an earnings turnaround driven by higher capacitance per unit and portfolio mix enhancement rather than relying on a sudden volume rebound in general consumer IT sets.
To verify the execution of this investment thesis going forward, key checkpoints include monitoring whether high-end MLCC shipment volume and pricing (ASP) sustain their upward momentum and whether the revenue mix successfully shifts toward AI PCs, servers, and automotive components as on-device AI hardware expands. These developments can be tracked through upcoming quarterly earnings releases, official IR 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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