Brokerage : Mirae Asset Securities
Analyst : Junseo Park (park.junseo@miraeasset.com)
Investment Rating : BUY (Maintained)
Target Price : KRW 1,300,000 (Raised)
Core Momentum : Full-scale earnings expansion and valuation re-rating driven by a ~KRW 3 Trillion FC-BGA CAPEX program backed by client prepayments/price guarantees, +13% FC-BGA ASP increases in 2026, and shifting valuation base to 2028(E)
📊 1. [Valuation & Key Financial Metrics]
- Rating & Target Price: BUY (Maintained) / Target Price KRW 1,300,000 (Raised by +145% from KRW 530,000) (Closing price KRW 918,000 as of May 4, 2026; upside potential 41.6%)
- Valuation Methodology: Shifted valuation benchmark base from 2026(E) to 2028(E) P/E multiples, reflecting +13% upward revision in 2026 FC-BGA ASP and multi-year structural price appreciation across major lines
- Medium-Term Growth Projections (2026F–2030F):
- Consolidated Revenue CAGR of +16%, Operating Profit CAGR of +36%
- Package Division Operating Profit CAGR of +51% (fueled by rising mix of high-margin AI server/network substrates)
- Key Financial Metrics & Forecast:
- Revenue (KRW): 2024 KRW 10.294 Trillion → 2025 KRW 11.314 Trillion → 2026(E) KRW 13.520 Trillion → 2027(E) KRW 15.915 Trillion
- Operating Profit (KRW): 2024 KRW 735.0 Billion → 2025 KRW 913.0 Billion → 2026(E) KRW 1.562 Trillion → 2027(E) KRW 2.293 Trillion
- Operating Profit Margin (OPM): 2024 7.1% → 2025 8.1% → 2026(E) 11.6% → 2027(E) 14.4%
- Net Profit (Controlling) (KRW): 2024 KRW 679.0 Billion → 2025 KRW 706.0 Billion → 2026(E) KRW 1.313 Trillion → 2027(E) KRW 1.905 Trillion
- EPS (KRW): 2024 KRW 8,752 → 2025 KRW 9,099 → 2026(E) KRW 16,914 → 2027(E) KRW 24,555
- Valuation Multiples (PER / PBR / ROE):
- 2024: PER 14.1x, PBR 1.1x, ROE 8.2%
- 2025: PER 28.0x, PBR 2.3x, ROE 7.7%
- 2026(E): PER 54.3x, PBR 7.4x, ROE 13.0%
- 2027(E): PER 37.4x, PBR 6.3x, ROE 16.5%
- Quarterly Performance & Outlook:
- 1Q26 Actual: Revenue KRW 3.2 Trillion (+17% YoY), Operating Profit KRW 280.6 Billion (+36% YoY). Excluding one-off costs of KRW 71.4 Billion, normalized operating profit stood at KRW 351.4 Billion, significantly beating consensus.
- 2Q26 Forecast: Revenue KRW 3.3 Trillion (+3% YoY), Operating Profit KRW 381.3 Billion (+36% YoY), with potential upside from ongoing customer FC-BGA price negotiations.
🚀 2. [Market Opportunities & Business Outlook]
- Massive FC-BGA CAPEX Execution Backed by Client Commitments:
- CAPEX Scale: 2026 CAPEX projected near KRW 3 Trillion, establishing a multi-year elevated investment run-rate.
- Customer De-Risking: Expansion driven by strong customer commitments, including upfront cash prepayments, volume guarantees, and contractual price protections.
- Vietnam Expansion: Commercial revenue contribution from the new Vietnam FC-BGA fab scheduled for 2028, modeling ramp-up utilization (40% → 70%) based on Fab 1 precedent.
- MLCC Tightness & Structural Price Hikes:
- Global lead times for certain MLCC lines have lengthened to 20–24 weeks (vs. standard 10 weeks).
- 2Q26 MLCC fab utilization at 95% and lean inventory cycles at 4 weeks (vs. standard 6 weeks) create strong conditions for broad AI MLCC price hikes.
- High-margin AI mix enrichment and substrate ASP gains provide robust fundamental growth even before factoring in blanket commodity price increases.
📝 Editor’s Comment (Perspective)
The analyst views Samsung Electro-Mechanics not merely as a passive component supplier, but as a critical infrastructure partner addressing acute bottlenecks in AI servers and network infrastructure (FC-BGA and AI MLCCs) with substantial pricing power. This perspective looks past short-term quarterly noise to emphasize the structural transformation verified by the ~KRW 3 Trillion FC-BGA CAPEX outlay, client-backed funding/price guarantees, and the 2028 Vietnam fab ramp-up, fully justifying a +145% target price upgrade using 2028 forward valuation multiples.
To evaluate whether this investment thesis unfolds as anticipated, key verification checkpoints include demonstrating underlying earnings power by delivering KRW 380B+ operating profit in 2Q26 (following 1Q26 one-off adjustments), formal disclosures of customer co-investments and prepayments for the KRW 3 Trillion CAPEX program, the realization of MLCC price hikes under 20+ week lead times and 4-week inventories, and progress on the 2028 Vietnam FC-BGA fab construction. Progress on these fronts can be tracked via upcoming quarterly earnings announcements, official investor relations disclosures, 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.
Investment Risk Notice: This content is provided for informational and linguistic reference purposes only. Under no circumstances does it constitute financial advice or a recommendation to buy or sell any specific securities. All investment decisions and financial responsibilities rest entirely with the investor.
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