Brokerage : SK Securities
Analyst : Hyoung-woo Park, Min-gyu Kwon
Investment Rating : BUY (Maintained)
Target Price : KRW 213,000 (Maintained)
Core Momentum : Rising MLCC content per box driven by device AI proliferation—even without set shipment growth—alongside H2 capacity utilization nearing 90% is expected to restore supplier pricing power and drive earnings expansion.
📊 1. [Valuation & Key Financial Metrics]
- Target Price & Rating: Target Price maintained at KRW 213,000, Rating maintained at BUY
- Stock Data (As of July 3, 2024): Current Price KRW 154,900, Market Capitalization KRW 11.57 Trillion
- Key Financial Forecasts (2023 → 2024E → 2025E):
- Revenue: KRW 8.91 Trillion → KRW 10.03 Trillion → KRW 10.83 Trillion
- Operating Profit: KRW 639.0 Billion → KRW 881.0 Billion → KRW 1.17 Trillion
- Net Profit (Controlling): KRW 423.0 Billion → KRW 695.0 Billion → KRW 863.0 Billion
- EPS: KRW 5,552 → KRW 8,959 → KRW 11,125
- PER / PBR: 27.6x / 1.5x → 17.3x / 1.4x → 13.9x / 1.3x
- EV/EBITDA: 7.9x → 7.0x → 5.8x
- ROE: 5.5% → 8.5% → 9.7%
🚀 2. [Market Opportunities & Business Outlook]
- Q2 2024 Earnings Outlook:
- Operating profit is forecast at KRW 201.3 Billion, slightly below previous estimates due to sluggish flagship smartphone sales at strategic clients and slow IT demand recovery in China, yet remaining solid relative to market concerns.
- H2 2024 Utilization & Industry Dynamics:
- MLCC capacity utilization, currently estimated at around 80%, is projected to climb toward 90% in H2 supported by seasonality and growing orders for AI and automotive applications.
- Reaching the ~90% utilization threshold is expected to alter supplier pricing outlooks and strengthen pricing negotiation dynamics.
- Device AI & Content/Box Expansion:
- Moving past historical reliance on pure end-device unit shipment growth, market expansion is now underpinned by rising MLCC content per unit (Contents/Box) in AI smartphones and AI PCs.
- The confluence of second-half seasonality and the onset of the on-device AI cycle increases the visibility of entering a structural upcycle.
📝 Editor’s Comment (Perspective)
The analyst views Samsung Electro-Mechanics not merely as a passive component supplier bound to consumer hardware shipment volumes, but as a structural beneficiary poised to regain pricing power as utilization approaches 90%, propelled by rising content per device across on-device AI and autonomous systems. The core perspective places greater significance on the qualitative cycle transition—where higher component density drives utilization and pricing leverage—than on baseline end-market unit volume growth.
To assess the progression of this investment thesis moving forward, verification should focus on whether MLCC utilization successfully ramps up from 80% to around 90% in the second half, whether high-capacitance component mix expands in line with AI smartphone and PC adoption, and whether supplier pricing conditions and ASP improvements materialize once the 90% utilization threshold is reached. These operational trends can be tracked through upcoming quarterly earnings announcements, official IR materials, and periodic financial reports.
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