Brokerage : Kyobo Securities
Analyst : Bo-young Choi
Investment Rating : Buy (Maintained)
Target Price : KRW 170,000 (Maintained)
Core Momentum : Earnings rebound expected in 1Q25 driven by new customer product launches, expanding Non-IT mix across AI and automotive sectors, and China’s trade-in subsidies following 4Q24 one-off cost absorption.
📊 1. [Valuation & Key Financial Metrics]
- Investment Rating & Target Price: Buy (Maintained) / KRW 170,000 (Maintained)
- Current Share Price (As of Jan 24, 2025): KRW 128,100
- Key Financial Metrics & Forecast:
- Revenue: 2024.12E KRW 10.29T (+15.5% YoY) → 2025.12E KRW 11.10T (+7.8% YoY) → 2026.12E KRW 12.18T (+9.8% YoY)
- Operating Profit: 2024.12E KRW 735.0B (OPM 7.1%) → 2025.12E KRW 930.0B (OPM 8.4%) → 2026.12E KRW 1.08T (OPM 8.8%)
- Net Profit: 2024.12E KRW 680.0B → 2025.12E KRW 805.0B → 2026.12E KRW 902.0B
- EPS: 2024.12E KRW 8,507 (+51.5% YoY) → 2025.12E KRW 10,072 (+18.4% YoY) → 2026.12E KRW 11,290 (+12.1% YoY)
- PER: 2024.12E 14.6x → 2025.12E 12.7x → 2026.12E 11.3x
- PBR: 2024.12E 1.1x → 2025.12E 1.1x → 2026.12E 1.0x
- ROE: 2024.12E 7.9% → 2025.12E 8.7% → 2026.12E 9.0%
- 4Q24 Earnings Review: Revenue of KRW 2.49T (+8.1% YoY, -4.7% QoQ), Operating Profit of KRW 115.0B (+4.3% YoY, -48.8% QoQ, OPM 4.6%), falling short of consensus (KRW 140.8B) due to one-off incentive payouts, seasonality, and soft IT set demand.
- 1Q25 Earnings Preview: Projected Revenue of KRW 2.66T (+1.8% YoY, +6.8% QoQ), Operating Profit of KRW 202.3B (+10.2% YoY, +75.9% QoQ, OPM 7.6%).
🚀 2. [Market Opportunities & Business Outlook]
- Component Division: 4Q fab utilization rate reached high-70%, ASP increased by 3%, and inventory remained healthy at ~5 weeks. Despite sluggish non-AI industrial demand, mix improvement is anticipated via increasing Non-IT exposure.
- Optics & Communication Solutions: Preparing delivery for major clients’ new product launches in 1Q25, while continuing the expansion of automotive camera supplies to a North American client.
- Package Solutions: While standard BGA faces price competition and soft mobile demand, higher revenue contribution from high-value FC-BGA is expected to drive division profitability.
- Macro & Industry Drivers: Expanding new demand across AI, automotive, and robotics to offset stagnant consumer IT, supported by China’s trade-in subsidies stimulating consumer electronics consumption.
📝 Editor’s Comment (Perspective)
The analyst views Samsung Electro-Mechanics as a recovering electronic components manufacturer transitioning away from stagnant legacy IT reliance toward high-growth Non-IT sectors such as AI, automotive, and robotics, having cleared 4Q one-off costs. The investment perspective emphasizes the qualitative improvement in product mix across all three business units and healthy inventory conditions underpinned by policy-driven consumer recovery.
To evaluate the validity of this investment thesis going forward, key tracking points include the actual earnings lift from major customer smartphone launches in 1Q25, the pace of automotive camera supply expansion to the North American client, utilization rate recovery and product mix shifts toward Non-IT MLCCs in the Component unit, and the margin contribution from high-end FC-BGA. These developments can be monitored through upcoming quarterly earnings reports, 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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