Brokerage : Kyobo Securities
Analyst : Boyoung Choi (20190031@iprovest.com)
Investment Rating : Buy (Maintained)
Target Price : KRW 1,200,000 (Raised)
Core Momentum : Unprecedented monthly cycle tightening across MLCC and FC-BGA, 5-year volume negotiations extending to 2032, and turnkey leadership in next-gen packaging (VPD, embedding, silicon capacitors)
📊 1. [Valuation & Key Financial Metrics]
- Rating & Target Price: Buy (Maintained) / Target Price KRW 1,200,000 (Raised) (Closing price KRW 914,000 as of May 8, 2026)
- Valuation Methodology: Applied a Target P/E multiple of 48.7x (2017 up-cycle peak) to 2026–2027 average controlling EPS of KRW 24,806
- Key Financial Metrics & Forecast:
- Revenue (KRW): 2024 KRW 10.294 Trillion → 2025 KRW 11.314 Trillion (Detailed quarterly sum table cites KRW 11.3146 Trillion) → 2026(E) KRW 13.0578 Trillion (+15.5% YoY) → 2027(E) KRW 16.901 Trillion
- Operating Profit (KRW): 2024 KRW 735.0 Billion → 2025 KRW 913.0 Billion (Detailed quarterly sum table cites KRW 912.3 Billion) → 2026(E) KRW 1.5352 Trillion (+68.3% YoY, 11.8% OPM) → 2027(E) KRW 2.6220 Trillion (15.5% OPM)
- Net Profit (KRW): 2024 KRW 703.0 Billion → 2025 KRW 731.0 Billion → 2026(E) KRW 1.7900 Trillion → 2027(E) KRW 2.0580 Trillion
- EPS (KRW): 2024 KRW 9,022 → 2025 KRW 9,099 → 2026(E) KRW 23,070 → 2027(E) KRW 26,541
- Valuation Multiples (PER / PBR / ROE):
- 2024: PER 13.7x, PBR 1.1x, ROE 8.2%
- 2025: PER 28.0x, PBR 2.0x, ROE 7.7%
- 2026(E): PER 39.6x, PBR 6.2x, ROE 16.3%
- 2027(E): PER 34.4x, PBR 5.4x, ROE 16.1%
🚀 2. [Market Opportunities & Business Outlook]
- FC-BGA Division (5-Year Commitments through 2032 & Full Utilization):
- Long-Term Volume Commitments: Engaging in aggressive capacity discussions with major clients to bind volumes and utilization for 5 years starting in 2028 (through 2032), reflecting the shift from server box growth to core AI computing infrastructure.
- Utilization & Pricing: Reaching mid-to-high 80% utilization with 2Q client additions, low 90% in 2Q, and theoretical full capacity in 2H26. Following 1Q26 price hikes, additional pricing negotiations are progressing for 2Q and 2H.
- 2026 Divisional Forecast: Package division revenue KRW 3.0024 Trillion (+30.4% YoY), operating profit KRW 451.5 Billion (15.0% OPM).
- MLCC Division (LTA Structuring & AI Price Premiums):
- Supply-Demand: Operating in a Murata-SEMCO duopoly with ongoing multi-year LTAs for AI server and automotive applications. Rising cost pressures and acute shortages support broad-based price increases.
- Operational Metrics: Capacity utilization rising to mid-90% in 2Q26 with inventories falling to the low 4-week range, driving steady margin expansion.
- 2026 Divisional Forecast: Component division revenue KRW 6.0825 Trillion (+17.0% YoY), operating profit KRW 896.8 Billion (14.7% OPM).
- Next-Gen Packaging Momentum (VPD & Substrate Embedding):
- Vertical Power Delivery (VPD) and die-embedded substrate architectures are emerging as critical vectors for the advanced packaging era from 2027 onward.
- Samsung Electro-Mechanics is positioned as the primary beneficiary through its integrated portfolio covering MLCCs, FC-BGA, and silicon capacitors.
📝 Editor’s Comment (Perspective)
The analyst views Samsung Electro-Mechanics not merely as a consumer-oriented component supplier, but as an indispensable AI computing infrastructure platform benefiting from monthly cycle tightening across both MLCCs and FC-BGA substrates. This perspective highlights long-term earnings visibility supported by 5-year volume commitments extending to 2032, full substrate capacity utilization in 2H26, and a unique turnkey position across advanced packaging architectures (VPD, embedding, silicon capacitors), justifying an up-cycle peak multiple of 48.7x.
To evaluate whether this investment thesis unfolds as anticipated, key verification checkpoints include formalizing 5-year binding FC-BGA customer agreements for 2028–2032, the realization of incremental FC-BGA and MLCC price increases in 2H26, sustaining low 4-week MLCC inventory levels alongside Component margins approaching 15%, and initial commercial design wins for next-gen VPD embedded packaging solutions. Progress on these fronts can be tracked via upcoming quarterly earnings announcements, official investor relations disclosures, 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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