Brokerage : Shinhan Securities
Analyst : Kang-ho Oh
Investment Rating : BUY (Maintained)
Target Price : KRW 200,000 (Raised)
Core Momentum : Proliferation of on-device AI is driving component specification upgrades and expanding applications, accelerating simultaneous price (P) and volume (Q) growth led by the Component division.
📊 1. [Valuation & Key Financial Metrics]
- Target Price & Valuation Basis: Raised to KRW 200,000 (applied a target P/B of 1.9x, the average during the 2020–2021 recovery cycle, to 2024F BPS of KRW 106,819).
- Investment Rating: BUY (Maintained)
- Stock Data (As of April 18, 2024): Current Price KRW 146,700, Market Capitalization KRW 10.96 Trillion, Foreign Ownership 31.70%
- Key Financial Forecasts (2023 → 2024F → 2025F):
- Revenue: KRW 8.91 Trillion → KRW 9.83 Trillion → KRW 10.71 Trillion
- Operating Profit: KRW 639.4 Billion → KRW 832.0 Billion → KRW 1.09 Trillion
- Net Profit (Controlling): KRW 423.0 Billion → KRW 593.0 Billion → KRW 785.0 Billion
- EPS: KRW 5,406 → KRW 7,585 → KRW 10,033
- BPS: KRW 101,129 → KRW 106,819 → KRW 114,271
- PER / PBR: 28.3x / 1.5x → 19.3x / 1.4x → 14.6x / 1.3x
- ROE: 5.5% → 7.3% → 9.2%
- EV/EBITDA: 7.9x → 5.8x → 4.9x
🚀 2. [Market Opportunities & Business Outlook]
- Q1 2024 Outlook & Revision Factors:
- Consolidated revenue forecast at KRW 2.4 Trillion (+20% YoY) and operating profit at KRW 170.7 Billion (+22% YoY, +55% QoQ).
- Operating margin is expected to expand to 7.0% (+2.2%p QoQ) supported by premium product mix enrichment and operating leverage.
- Component: Revenue projected at KRW 1.0 Trillion (+22% YoY, +3% QoQ). Full-scale MLCC revenue growth and profitability improvement prompted an upward revision in Q1 operating profit forecast from KRW 150.0 Billion to KRW 170.7 Billion.
- Optics & Package: Revenue estimated at KRW 1.0 Trillion (+27% YoY) and KRW 400.0 Billion (+1% YoY) respectively, signaling gradual recovery from 2023 lows.
- Annual Outlook & Quarterly Trend:
- Full-year 2024 Component division revenue is projected to reach KRW 4.41 Trillion (+13% YoY).
- Quarterly operating profit trajectory: Q1 KRW 170.7 Billion → Q2 KRW 207.1 Billion → Q3 KRW 257.8 Billion → Q4 KRW 196.4 Billion.
- On-Device AI Catalysts:
- Commercial launches of on-device AI products serve as the primary catalyst lifting earnings estimates across MLCC and packaging substrate divisions.
- Simultaneous gains in pricing (P) via higher specs and volume (Q) via broader adoption establish a virtuous earnings cycle through 2024–2025.
📝 Editor’s Comment (Perspective)
The analyst views Samsung Electro-Mechanics not merely as a cyclical component maker rebounding from a consumer hardware downturn, but as a structural beneficiary entering a virtuous earnings cycle driven by simultaneous pricing (P) and volume (Q) expansion as on-device AI proliferates. The overarching perspective places greater significance on the sustainable upward revisions in MLCC and substrate profitability and the multi-year trajectory toward KRW 1 Trillion in operating profit by 2025 than on short-term baseline recovery metrics.
To assess the progression of this investment thesis moving forward, verification should focus on whether Q1 operating profit confirms the turnaround to KRW 170.7 Billion with Component revenue crossing KRW 1.0 Trillion, whether on-device AI integration drives continuous quarterly margin expansion, and whether full-year Component sales track toward KRW 4.4 Trillion en route to the KRW 1.09 Trillion operating profit milestone in 2025. These operational developments can be monitored through upcoming quarterly financial announcements, official investor relations presentations, and periodic 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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