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 through simultaneous P and Q expansion in components driven by AI device proliferation and expanding high-value FCBGA orders from global customers.
📊 1. [Valuation & Key Financial Metrics]
- Investment Rating & Target Price: Buy (Maintained) / KRW 190,000 (Maintained, applying a target P/B of 1.7x, based on the historical 4-year average P/B, to 2025F BPS of KRW 111,912)
- Current Share Price (As of Jan 07, 2025): KRW 126,800 (Upside potential: 49.8%)
- Key Financial Metrics & Forecast:
- Revenue: 2023A KRW 8.91T → 2024F KRW 10.07T → 2025F KRW 10.82T → 2026F KRW 12.01T
- Operating Profit: 2023A KRW 639.4B → 2024F KRW 748.4B (OPM 7.4%) → 2025F KRW 910.8B (+22% YoY, OPM 8.4%) → 2026F KRW 1.14T (OPM 9.5%)
- Net Profit (Controlling): 2023A KRW 423.0B → 2024F KRW 534.8B → 2025F KRW 653.1B → 2026F KRW 831.0B
- EPS: 2023A KRW 5,450 → 2024F KRW 6,881 → 2025F 8,409 → 2026F 10,701
- PER: 2023A 28.3x → 2024F 18.1x → 2025F 15.2x → 2026F 11.9x
- PBR: 2023A 1.5x → 2024F 1.2x → 2025F 1.1x → 2026F 1.1x
- ROE: 2023A 5.5% → 2024F 6.7% → 2025F 7.7% → 2026F 9.2%
- Dividend Yield (DY): 2023A 0.8% → 2024F 1.2% → 2025F 1.7% → 2026F 1.7%
- 4Q24 Earnings Preview: Projected Revenue of KRW 2.26T, Operating Profit of KRW 128.4B (+16% YoY, OPM 5.7%), revised down by 21% from previous Shinhan estimates. (In the Component division, industrial MLCC demand remains solid, while fab utilization is estimated at ~80% reflecting off-season effects).
🚀 2. [Market Opportunities & Business Outlook]
- Component Division (MLCC): 4Q24 fab utilization was around 80% (annual average 80–85%), with 2025 annual utilization projected to reach 90%. Division revenue is forecast to grow +6% YoY in 2025 supported by AI device rollouts, Chinese component demand recovery, and sustained industrial MLCC growth (>20% revenue share).
- Package Substrate Division: While standard BGA experiences slight downward adjustments, high-value FCBGA demand remains resilient with expanding order volumes from global customers.
- Catalysts & Valuation Drivers: Structural expansion in AI hardware and rising custom ASIC demand serve as core tailwinds for both the Component and Package divisions.
📝 Editor’s Comment (Perspective)
The analyst views Samsung Electro-Mechanics not through the lens of short-term quarterly estimate revisions, but as an electronics hardware beneficiary positioned for concurrent P (price) and Q (quantity) expansion driven by AI device deployment and IT demand recovery. The thesis emphasizes portfolio diversification into high-end FCBGA and expanding industrial MLCC revenue share (>20%) as the primary catalyst for a 2025 earnings recovery and valuation re-rating.
To assess whether this investment thesis progresses according to expectations, key verification points include whether the Component division’s fab utilization reaches 90% in 2025, whether industrial MLCC revenue share successfully exceeds 20%, the pace of demand recovery in Chinese client components, and concrete order momentum for high-end FCBGA substrates from global customers. These factors 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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