Brokerage : Shinhan Securities
Analyst : Kang-ho Oh, Ji-beom Seo
Investment Rating : Buy (Maintained)
Target Price : KRW 190,000 (Maintained)
Core Momentum : Driving earnings recovery and valuation re-rating through expanding high-value MLCC demand across AI devices and automotive sectors, along with rising FC-BGA supply to global server and network clients.
📊 1. [Valuation & Key Financial Metrics]
- Investment Rating & Target Price: Buy (Maintained) / KRW 190,000 (Maintained, applying a target P/B of 1.6x, reflecting a 5% premium to the historical 5-year average P/B, to 2025F BPS of KRW 114,183)
- Current Share Price (As of Jan 24, 2025): KRW 128,100 (Upside potential: 48.3%)
- Key Financial Metrics & Forecast:
- Revenue: 2023A KRW 8.91T → 2024F KRW 10.29T → 2025F KRW 10.97T → 2026F KRW 11.86T
- Operating Profit: 2023A KRW 639.4B → 2024F KRW 735.0B (OPM 7.1%) → 2025F KRW 896.5B (OPM 8.2%) → 2026F KRW 1.01T (OPM 8.5%)
- Net Profit (Controlling): 2023A KRW 423.0B → 2024F KRW 679.1B → 2025F KRW 781.5B → 2026F KRW 865.2B
- EPS: 2023A KRW 5,450 → 2024F KRW 8,752 → 2025F KRW 10,072 → 2026F KRW 11,151
- PER: 2023A 28.3x → 2024F 14.3x → 2025F 12.8x → 2026F 11.6x
- PBR: 2023A 1.5x → 2024F 1.2x → 2025F 1.1x → 2026F 1.0x
- ROE: 2023A 5.5% → 2024F 8.4% → 2025F 9.1% → 2026F 9.4%
- Dividend Yield (DY): 2023A 0.8% → 2024F 1.5% → 2025F 1.7% → 2026F 2.1%
- 4Q24 Earnings Review: Revenue of KRW 2.49T (+8.1% YoY, -4.7% QoQ), Operating Profit of KRW 115.0B (+1.0% YoY, -48.9% QoQ, OPM 4.6%), missing Shinhan’s estimate by -10% due to one-off expense recognition.
- 1Q25 Earnings Preview: Projected Revenue of KRW 2.64T, Operating Profit of KRW 202.9B (OPM 7.7%).
🚀 2. [Market Opportunities & Business Outlook]
- Component Division (MLCC): 4Q24 revenue increased +11% YoY (exceeding Shinhan’s estimate by +5%). MLCC fab utilization rate is projected to recover to 90% in 1Q25 (up from an estimated 83% in 2H24). Growth driven by general IT demand recovery, sustained industrial demand (~18% share), and expanding automotive MLCC portion (from 25% in 2024 to 29% in 2025).
- Package Solution Division (Substrates): 4Q24 revenue surged +24% YoY (exceeding Shinhan’s estimate by +13%). High-end FC-BGA revenue share is projected to expand by +4%p YoY on the back of higher shipments to global server and network clients.
- Optics & Solution Division (Modules): Driven by new flagship smartphone releases in 4Q24 and expanding supply of premium camera modules to Chinese smartphone manufacturers.
- AI & ASIC Expansion: Sustained growth in generative AI markets and rising interest in custom ASIC chips are expected to act as structural demand catalysts for both the Component and Package divisions.
📝 Editor’s Comment (Perspective)
The analyst views Samsung Electro-Mechanics not simply as a legacy passive component maker, but as an advanced hardware enabler positioned for simultaneous P (price) and Q (quantity) expansion fueled by AI device adoption and automotive electronics transition. The overarching investment thesis emphasizes structural quality improvements—underpinned by rising high-margin industrial/automotive MLCC exposure and global server FC-BGA growth—supporting a multi-year earnings recovery and valuation level-up.
To evaluate whether this thesis progresses as projected, key verification points include whether 1Q25 MLCC fab utilization reaches the targeted 90% level, whether automotive MLCC revenue share hits the 29% mark, the pace of FC-BGA revenue share expansion (+4%p YoY) supported by server and network infrastructure demand, and tangible order momentum from AI/ASIC applications. These developments can be monitored through upcoming quarterly earnings releases, 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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