Brokerage : Meritz Securities
Analyst : Seung-soo Yang
Investment Rating : Buy (Maintained)
Target Price : KRW 165,000 (Maintained)
Core Momentum : Qualitative transformation driven by an expanding revenue share from server and automotive applications alongside rising MLCC ASP, securing high earnings visibility for 2025.
📊 1. [Valuation & Key Financial Metrics]
- Investment Rating & Target Price: Buy (Maintained) / KRW 165,000 (Maintained, 12M Target Price)
- Current Share Price (As of Dec 12, 2024): KRW 120,700 (Upside potential: 36.7%)
- Market Capitalization: KRW 9.02T
- Key Financial Metrics & Forecast:
- Revenue: 2023A KRW 8.91T → 2024E KRW 10.17T → 2025E KRW 10.62T → 2026E KRW 11.44T
- Operating Profit: 2023A KRW 639.4B → 2024E KRW 755.4B → 2025E KRW 933.4B (+23.6% YoY) → 2026E KRW 1.06T (OPM 9.3%)
- Net Profit (Controlling): 2023A KRW 423.0B → 2024E KRW 572.5B → 2025E KRW 769.6B → 2026E KRW 882.3B
- EPS (Controlling): 2023A KRW 5,617 → 2024E KRW 7,619 (+35.6% YoY) → 2025E KRW 10,239 (+24.5% YoY) → 2026E KRW 11,736 (+14.7% YoY)
- PER: 2023A 27.5x → 2024E 15.8x → 2025E 11.8x → 2026E 10.3x
- PBR: 2023A 1.5x → 2024E 1.1x → 2025E 1.0x → 2026E 1.0x
- ROE: 2023A 5.5% → 2024E 7.1% → 2025E 8.9% → 2026E 9.4%
- 4Q24 Earnings Preview: Consolidated Revenue of KRW 2.35T (+2.0% YoY, -10.0% QoQ), Operating Profit of KRW 142.1B (+28.7% YoY, -36.6% QoQ, OPM 6.0%), missing consensus (KRW 164.6B) by -13.7% due to off-season inventory adjustments (inventory days at 5–6 weeks) and lower fab utilization (77.0%).
🚀 2. [Market Opportunities & Business Outlook]
- Structural Portfolio Mix: Combined revenue share from server and automotive sectors is projected to expand steadily from 22.2% in 2024 to 28.1% in 2025 and 33.4% in 2026.
- Component Division (MLCC): Despite slowing shipment growth (+10.3% YoY in 2024 vs. +18.3% in 2023), Blended ASP improved by +5.8% YoY (vs. -20.8% in 2023), demonstrating structural business quality improvement. Following 4Q24 utilization adjustment (77%), fab utilization is projected to recover sequentially in 2025 (81% in 1Q25 → 85% in 2Q25 → 88% in 3Q25).
- Industry Dynamics: While industrial and automotive demand remains solid, uncertainties persist in general IT hardware. Aggressive 4Q inventory adjustments are viewed constructively as preparation for next year’s demand.
📝 Editor’s Comment (Perspective)
The analyst views Samsung Electro-Mechanics not as a cyclical supplier hindered by short-term IT hardware sluggishness and 4Q inventory clearing, but as a structurally improving component manufacturer that has proven the qualitative upgrade of its business via server and automotive expansion and positive MLCC ASP growth. The overarching perspective places greater weight on the rising revenue contribution from server and automotive segments and the resulting high visibility of 2025 operating profit growth rather than transient volume moderation.
To verify whether this investment thesis materializes as projected, key tracking points include the recovery of MLCC fab utilization above 80% in 1Q25 following intensive 4Q destocking, the progression of the server and automotive revenue share toward the 28.1% target in 2025, and sustained stability in MLCC blended pricing. These factors can be monitored through upcoming quarterly financial announcements, official company IR presentations, 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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