Brokerage : SK Securities
Analyst : Hyoungwou Park, Mingyu Kwon
Investment Rating : BUY (Maintained)
Target Price : KRW 187,000 (Maintained)
Core Momentum : Rising utilization driven by high-spec MLCC demand in AI servers and automotive applications, coupled with expanding AI accelerator FC-BGA shipments to North American Big Tech, secures resilient earnings growth.
📊 1. [Valuation & Key Financial Metrics]
- Rating & Target Price: BUY (Maintained), Target Price of KRW 187,000 maintained
- Annual Earnings Forecasts (K-IFRS Consolidated):
- 2024A: Revenue KRW 10.294 Trillion / Operating Profit KRW 735 Billion / Net Profit (Controlling) KRW 679 Billion
- 2025F: Revenue KRW 11.174 Trillion / Operating Profit KRW 848 Billion / Net Profit (Controlling) KRW 585 Billion
- 2026F: Revenue KRW 11.960 Trillion / Operating Profit KRW 1.037 Trillion / Net Profit (Controlling) KRW 741 Billion
- 2027F: Revenue KRW 12.311 Trillion / Operating Profit KRW 1.219 Trillion / Net Profit (Controlling) KRW 876 Billion
- Key Valuation Multiples (2024A → 2025F → 2026F → 2027F):
- PER: 15.0x → 19.7x → 15.6x → 13.2x
- PBR: 1.1x → 1.2x → 1.2x → 1.1x
- EV/EBITDA: 5.9x → 6.3x → 5.4x → 4.7x
- ROE: 8.2% → 6.5% → 7.7% → 8.6%
- EPS: KRW 8,258 → KRW 7,542 → KRW 9,550 → KRW 11,292
- Quarterly Performance & Outlook:
- 2Q25 Review: Revenue KRW 2.785 Trillion, Operating Profit KRW 213 Billion (QoQ +1%, OPM 7.6%). Slightly beat the consensus (KRW 207.6 Billion) despite unfavorable FX conditions.
- 3Q25 Preview: Projected Revenue of KRW 2.790 Trillion (YoY +7%), Operating Profit of KRW 242.3 Billion (QoQ +8%, YoY +8%, OPM 8.7%).
🚀 2. [Market Opportunities & Business Outlook]
- Component (MLCC) High-Spec Transition & Utilization Recovery:
- 2Q25 MLCC shipments increased 3.5% QoQ and ASP rose by an estimated 1.8% QoQ, driven by solid demand across industrial, automotive, and AI servers. Utilization reached 90%, and inventory days dropped below 4 weeks.
- 3Q25 utilization is projected to challenge the 95% level, showing clear differentiation against broader passive component oversupply, despite potential slight ASP moderation from higher consumer IT exposure.
- AI server MLCC content per unit can exceed 10x that of general servers, supporting structural spec upgrades.
- Package Substrates (FC-BGA/BGA) Outperforming Market Overhang:
- Despite severe oversupply across general substrate markets, package revenue expanded QoQ driven by robust demand for Big Tech AI accelerators and server chips.
- 2Q25 package revenue recorded KRW 564.6 Billion (YoY +13%, QoQ +13%), with notable revenue share expansion from key North American AI/server accounts.
- FC-BGA annual revenue is forecast to grow from KRW 899.1 Billion in 2024 to KRW 1.088 Trillion in 2025F and KRW 1.391 Trillion in 2026F.
- North American Big Tech Client Expansion:
- Broad multi-product collaboration encompassing autonomous driving cameras, MLCCs, and package substrates.
- Annual revenue from this primary North American customer is expected to surpass KRW 1 Trillion in 2026.
- Revenue Forecasts by Business Division (2025F → 2026F):
- Component: KRW 5.204 Trillion (YoY +17%) → KRW 5.566 Trillion (YoY +7%)
- Optics & Communication: KRW 3.733 Trillion (YoY -2%) → KRW 3.779 Trillion (YoY +1%)
- Package: KRW 2.237 Trillion (YoY +10%) → KRW 2.616 Trillion (YoY +17%)
📝 Editor’s Comment (Perspective)
The analyst views Samsung Electro-Mechanics not as a generic component vendor vulnerable to broad electronics industry overcapacity and macroeconomic uncertainties, but as an advanced hardware player proving fundamental strength via expanding capacity utilization and disciplined inventory management in high-value AI server and automotive domains. Greater weight is placed on structural MLCC spec upgrades driven by AI infrastructure and direct leverage to North American Big Tech AI accelerator demand.
To verify whether this investment thesis materializes going forward, investors should monitor whether the component division achieves the 95% utilization threshold in 3Q25 while keeping inventory under 4 weeks, whether AI accelerator FC-BGA revenue continues its structural growth trajectory amidst general market supply pressures, and whether multi-product collaboration with the primary North American Big Tech client scales to surpass KRW 1 Trillion in annual revenue by 2026. These developments can be tracked through upcoming quarterly earnings releases, official IR presentations, and regulatory filings.
📢 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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