Brokerage : Mirae Asset Securities
Analyst : Jun-seo Park
Investment Rating : BUY (Maintained)
Target Price : KRW 200,000 (Maintained)
Core Momentum : Set for a powerful earnings turnaround in 2025 following 2024 inventory stabilization, driven by a surge in MLCC capacitance per device from On-Device AI smartphones and robust high-value AI Power industrial demand.
📊 1. [Valuation & Key Financial Metrics]
- Investment Rating & Target Price: BUY (Maintained) / KRW 200,000 (Maintained; historical 5-year floor provides downside support at P/B 1.05x, highlighting significant upside from current 2024F/2025F P/B of 1.15x and 1.06x vs. 5-year historical average of 1.5x)
- Current Share Price (As of Oct 7, 2024): KRW 131,600 (Upside potential: 52.0%)
- Market Capitalization: KRW 9.83T
- Key Financial Metrics & Forecast:
- Revenue: 2023A KRW 8.91T → 2024F KRW 10.40T → 2025F KRW 12.10T
- Operating Profit: 2023A KRW 639.0B → 2024F KRW 795.0B (OPM 7.6%) → 2025F KRW 1.09T (Table: KRW 1,090.0B, OPM 9.0%)
- Net Profit (Controlling): 2023A KRW 423.0B → 2024F KRW 639.0B → 2025F KRW 834.0B
- EPS: 2023A KRW 5,450 → 2024F KRW 8,234 (+51.1% YoY) → 2025F KRW 10,741
- PER: 2023A 28.1x → 2024F 16.0x → 2025F 12.3x
- PBR: 2023A 1.5x → 2024F 1.2x → 2025F 1.1x
- ROE: 2023A 5.5% → 2024F 7.8% → 2025F 9.3%
- Dividend Yield: 2023A 0.8% → 2024F 1.1% → 2025F 1.4%
- 3Q24 Earnings Preview: Projected Revenue of KRW 2.68T (+14% YoY), Operating Profit of KRW 223.1B (+21% YoY), trimmed by -1% and -7% respectively against prior forecasts. Reflects lower MLCC shipment growth (+13% → +10%) due to general IT set softness and a lower USD/KRW assumption (KRW 1,370 → KRW 1,330). However, MLCC ASP is expected to remain flat despite FX headwinds, supported by resilient industrial and automotive sales.
🚀 2. [Market Opportunities & Business Outlook]
- On-Device AI Proliferation & 2025 MLCC Outlook: 2025 MLCC volume (Q) and price (P) are projected to grow +14.7% YoY and +5.7% YoY respectively. The full-scale introduction of upgraded APs (e.g., Snapdragon 8 Gen 4 with +24% CPU speed and +49% GPU frequency) will expand smartphone MLCC capacitance (μF) content by +24% vs. previous generation (+10% across total lineup), complemented by +3% YoY smartphone and PC/NB shipment growth.
- Lean Inventory Levels: Samsung Electro-Mechanics’ inventory sits at a lean 4 weeks (below historical average), with downstream set makers also maintaining healthy MLCC stock levels.
- Industrial AI Power MLCCs: Demand for high-value AI power MLCCs remains solid, highlighted by Delta Electronics’ 1Q24 AI Power revenue surging +200% YoY.
📝 Editor’s Comment (Perspective)
The analyst views Samsung Electro-Mechanics not through transient 3Q FX headwinds and near-term IT demand adjustments, but as an advanced electronics hardware manufacturer positioned for a structural earnings surge driven by On-Device AI hardware upgrades in 2025. With downside protected by a historical 5-year valuation floor at P/B 1.05x, the investment thesis centers on substantial content expansion—led by a +24% jump in MLCC capacitance per device for next-generation AI smartphones and booming AI Power industrial demand—driving full-year 2025 operating profit back over the KRW 1T mark to KRW 1.09T.
To verify whether this investment thesis progresses as projected, key tracking points include maintaining healthy ~4-week inventory levels post-3Q, realizing concurrent 2025 MLCC volume (+14.7%) and price (+5.7%) growth, the measurable expansion of MLCC capacitance content in flagship AI smartphones, and sustained sales momentum in high-value AI Power components. These developments can be monitored through upcoming quarterly financial disclosures, official company IR presentations, and regular 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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