Brokerage : Shinhan Securities
Analyst : Kang-ho Oh
Investment Rating : BUY (Maintained)
Target Price : KRW 210,000 (Maintained)
Core Momentum : Poised to cross the KRW 1T operating profit milestone in 2025, driven by simultaneous P and Q expansion in MLCCs, accelerating high-value product mix, and surging Big Tech AI infrastructure CapEx.
📊 1. [Valuation & Key Financial Metrics]
- Investment Rating & Target Price: BUY (Maintained) / KRW 210,000 (Maintained, applying a target P/B of 1.9x—the average from the 2020–2021 earnings recovery cycle analogous to current growth drivers—to 2024F BPS of KRW 108,158)
- Current Share Price (As of Sep 25, 2024): KRW 135,700 (Upside potential: 54.8%)
- Market Capitalization: KRW 10.14T
- Key Financial Metrics & Forecast:
- Revenue: 2023A KRW 8.91T → 2024F KRW 10.31T → 2025F KRW 11.07T → 2026F KRW 12.27T
- Operating Profit: 2023A KRW 639.4B → 2024F KRW 823.4B (OPM 8.0%) → 2025F KRW 1.03T (Table: KRW 1,034.1B, +25.6% YoY, OPM 9.3%) → 2026F KRW 1.25T (Table: KRW 1,248.2B, OPM 10.2%)
- Net Profit (Controlling): 2023A KRW 423.0B → 2024F KRW 705.6B → 2025F KRW 859.1B → 2026F KRW 1.03T
- PER: 2023A 28.3x → 2024F 15.0x → 2025F 12.3x → 2026F 10.3x
- PBR: 2023A 1.5x → 2024F 1.3x → 2025F 1.2x → 2026F 1.1x
- ROE: 2023A 5.5% → 2024F 8.7% → 2025F 9.9% → 2026F 10.9%
- Dividend Yield (DY): 2023A 0.8% → 2024F 1.1% → 2025F 1.6% → 2026F 1.6%
- 3Q24 Earnings Preview: Projected Revenue of KRW 2.5862T (+9.6% YoY, +0.2% QoQ), Operating Profit of KRW 227.0B (+23.4% YoY, +9.1% QoQ, OPM 8.8%). Operating margin is expected to expand by +1.0%p YoY on operating leverage from high-value Component (+16% YoY) and Package (+17% YoY) revenue growth.
- 4Q24 Earnings Forecast: Projected Revenue of KRW 2.5147T (+9.0% YoY, -2.8% QoQ), Operating Profit of KRW 208.0B (+88.4% YoY, -8.4% QoQ, OPM 8.3%).
🚀 2. [Market Opportunities & Business Outlook]
- Component Division (MLCC): 3Q24 revenue projected to grow +16% YoY and +10% QoQ. Key 2H24 assumptions include MLCC price (P) up +3% YoY, 2H fab utilization rising to 90%–95% (vs. 80%–85% in 1H), and industrial MLCC revenue mix reaching ~18%. P and Q increases driven by AI proliferation represent a structural mid-to-long term catalyst rather than a transient event.
- Package Solution Division: 3Q24 revenue projected to expand +17% YoY, driven by strong mix enrichment from high-value substrates.
- Big Tech CapEx Acceleration: Global Big Tech infrastructure CapEx growth (+45% YoY in 2024F, +15% YoY in 2025F) underpins sustained high-end MLCC and server substrate demand.
📝 Editor’s Comment (Perspective)
The analyst views Samsung Electro-Mechanics as entering a clear structural earnings recovery phase, underpinned by aggressive global Big Tech CapEx (+45% in 2024F, +15% in 2025F) and expanding AI device adoption. Maintaining a target price of KRW 210,000 based on a 1.9x target P/B multiple (matching the 2020–2021 earnings recovery cycle), the investment thesis underscores that simultaneous volume (Q) and pricing (P) growth in MLCCs represents a durable multi-year driver that will propel 2025 operating profit past KRW 1.03T.
To evaluate whether this investment thesis progresses according to expectations, key tracking points include achieving 90%–95% MLCC fab utilization and an ~18% industrial revenue mix in 2H24, the continuous translation of Big Tech CapEx into high-performance MLCC and substrate orders, and the attainment of full-year 2025 operating profit guidance (KRW 1.034T). These developments can be monitored through upcoming quarterly financial announcements, official company IR presentations, and regulatory filings.
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Source: This content has been structured and newly written based on officially disclosed financial facts and data from brokerage reports.
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