Brokerage : SK Securities
Analyst : Hyoung-woo Park
Investment Rating : BUY (Maintained)
Target Price : KRW 213,000 (Raised)
Core Momentum : Surging MLCC content per box driven by on-device AI proliferation—even without broader set volume growth—combined with structural mix expansion in automotive and AI server applications is projected to drive an earnings upcycle.
📊 1. [Valuation & Key Financial Metrics]
- Target Price & Rating: Target Price raised to KRW 213,000, Rating maintained at BUY
- Stock Data (As of June 4, 2024): Current Price KRW 153,200, Market Capitalization KRW 11.44 Trillion, Major Shareholders (Samsung Electronics & 5 affiliates 23.83%, National Pension Service 10.41%)
- Key Financial Forecasts (2023 → 2024E → 2025E):
- Revenue: KRW 8.91 Trillion → KRW 10.04 Trillion → KRW 10.83 Trillion
- Operating Profit: KRW 639.0 Billion → KRW 892.0 Billion (+40%) → KRW 1.17 Trillion (+32%)
- Net Profit (Controlling): KRW 423.0 Billion → KRW 703.0 Billion → KRW 864.0 Billion
- EPS: KRW 5,552 → KRW 9,061 → KRW 11,128
- PER / PBR: 27.6x / 1.5x → 16.9x / 1.4x → 13.8x / 1.3x
- ROE: 5.5% → 8.6% → 9.7%
🚀 2. [Market Opportunities & Business Outlook]
- On-Device AI Proliferation & Content/Box Growth:
- Shifting away from past reliance on unit set volume growth, market expansion is propelled by higher MLCC content per unit (Contents/Box) in AI smartphones and AI PCs.
- Second-half seasonality aligned with flagship on-device AI rollouts from North American tech leaders enhances visibility for entering a full-scale upcycle.
- Capacity utilization for MLCC, currently at ~80%, is poised for further upward expansion.
- Structural Transformation into AI, Server, and Automotive Supplier:
- Smartphone exposure within total MLCC sales, which previously exceeded 40–50%, is projected to fall below 20% in specific quarters by 2025.
- Automotive MLCC: Share has climbed to 23% despite general EV industry slowdown, with expectations to reach 30% by Q3 2025; also positively impacting automotive camera modules.
- Industrial/Server MLCC: AI accelerator adoption has doubled MLCC content per server (+100%+), with industrial MLCC share forecast to rise from current 17% to over 20% by 2025.
- Chinese MLCC shipments bottomed in Q1 and are rebounding from Q2.
📝 Editor’s Comment (Perspective)
The analyst views Samsung Electro-Mechanics not as a cyclical hardware component vendor dependent on consumer device volume cycles, but as a key enabler structurally transforming into an AI server and autonomous automotive component leader benefiting from component density upgrades. The overarching perspective places greater significance on content-per-box expansion across on-device AI and the structural reduction of smartphone dependence in favor of automotive and industrial channels.
To assess the ongoing progression of this investment thesis, verification should focus on whether MLCC utilization scales past the 80% baseline during H2 AI product rollouts, whether the automotive MLCC revenue share steadily tracks toward the 30% target by 2025, and whether surging server demand translates into robust annual operating profit growth (KRW 892.0 Billion in 2024E to KRW 1.17 Trillion in 2025E). These developments can be monitored through upcoming quarterly earnings announcements, investor relations presentations, and periodic financial reports.
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