Brokerage : Shinhan Securities
Analyst : Kangho Oh (snowkh@shinhan.com)
Investment Rating : BUY (Maintained)
Target Price : KRW 2,200,000 (Lowered)
Core Momentum : Long-term upward revisions in earnings forecasts and structural growth driven by expanded high-value orders and ASP gains across high-end MLCCs and silicon capacitors
📊 1. [Valuation & Key Financial Metrics]
- Rating & Target Price: BUY (Maintained) / Target Price KRW 2,200,000 (Lowered) (Closing price KRW 879,000 as of July 30, 2026; upside potential 150.3%)
- Valuation Basis: Applied Target P/E of 40.4x to 2028(E) earnings (lowered by 31% reflecting broader IT sector share price weakness; applies a 10% premium over Murata’s 2024–2025 High P/E average)
- Earnings Revisions: 2028(E) EPS raised by +6% compared to previous estimates
- Key Financial Metrics & Forecast:
- Revenue (KRW): 2024 KRW 10.2941 Trillion → 2025 KRW 11.3145 Trillion → 2026(E) KRW 14.3566 Trillion → 2027(E) KRW 17.8401 Trillion → 2028(E) KRW 23.1941 Trillion
- Operating Profit (KRW): 2024 KRW 735.0 Billion → 2025 KRW 913.3 Billion → 2026(E) KRW 1.9498 Trillion → 2027(E) KRW 3.5033 Trillion → 2028(E) KRW 5.2122 Trillion
- Net Profit (Controlling) (KRW): 2024 KRW 679.1 Billion → 2025 KRW 706.1 Billion → 2026(E) KRW 1.5992 Trillion → 2027(E) KRW 2.8078 Trillion → 2028(E) KRW 4.1713 Trillion
- Valuation Multiples (PER / PBR / ROE):
- 2024: PER 14.3x, PBR 1.1x, ROE 8.2%
- 2025: PER 28.3x, PBR 2.1x, ROE 7.7%
- 2026(E): PER 42.9x, PBR 6.2x, ROE 15.6%
- 2027(E): PER 24.4x, PBR 5.1x, ROE 23.0%
- 2028(E): PER 16.4x, PBR 3.9x, ROE 27.1%
- 2Q 2026 Results (2Q26):
- Operating profit surged +107% YoY, exceeding brokerage forecasts for revenue by +6% and operating profit by +11%
🚀 2. [Market Opportunities & Business Outlook]
- 2Q26 Segment Performance Drivers:
- Component Division (MLCC): Solid growth led by expansion in AI industrial and automotive high-value components (estimated at 25% revenue share).
- Package Solutions (FC-BGA): FC-BGA revenue share estimated at 58~63% within the division, serving as the core earnings driver.
- Order Expansion & ASP Trajectory:
- Announced three major supply agreements recently, including two MLCC contracts totaling approx. KRW 750.0 Billion and a silicon capacitor contract of approx. KRW 1.6 Trillion in May.
- Sustained global demand for high-end MLCCs and a higher mix of premium products are driving an increase in corporate-wide ASPs.
- Quarterly Profit Estimates:
- Upwardly revised 3Q operating profit estimates for the Component and Package Solutions divisions by +16% and +32%, respectively.
- Solidifying top-tier competitive standing in components and substrates under the evolving AI industrial paradigm.
📝 Editor’s Comment (Perspective)
The analyst views Samsung Electro-Mechanics not merely as a victim of broader IT sector multiple contractions, but as a top-tier global supplier whose fundamentals are accelerating into a structural upward revision cycle powered by premium AI and automotive hardware orders. While target multiples were adjusted lower to account for prevailing equity market conditions, the overarching perspective emphasizes the quality of structural earnings growth driven by large-scale order backlogs and expanding blended ASPs.
To evaluate whether this investment thesis continues to materialize, key verification checkpoints include the achievement of the upwardly revised 3Q operating profits across Component and Package divisions, the sequential revenue recognition of the KRW 750.0 Billion MLCC and KRW 1.6 Trillion silicon capacitor supply contracts, and the sustained expansion of FC-BGA revenue share alongside corporate ASP gains. These operational trends can be monitored through upcoming quarterly earnings announcements, investor relations materials, and periodic regulatory disclosures.
📢 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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