Brokerage : SK Securities
Analyst : Hyoungwou Park, Mingyu Kwon
Investment Rating : BUY (Maintained)
Target Price : KRW 187,000 (Maintained)
Core Momentum : Differentiated earnings resilience driven by expanding high-value MLCC demand across AI servers and automotive platforms, alongside customer base expansion for AI accelerator and custom ASIC FC-BGA substrates.
📊 1. [Valuation & Key Financial Metrics]
- Rating & Target Price: BUY (Maintained), Target Price maintained at KRW 187,000
- 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 10.967 Trillion / Operating Profit KRW 871 Billion / Net Profit (Controlling) KRW 671 Billion
- 2026F: Revenue KRW 11.707 Trillion / Operating Profit KRW 1.076 Trillion / Net Profit (Controlling) KRW 837 Billion
- 2027F: Revenue KRW 12.041 Trillion / Operating Profit KRW 1.235 Trillion / Net Profit (Controlling) KRW 965 Billion
- Key Valuation Multiples (2024A → 2025F → 2026F → 2027F):
- PER: 15.0x → 14.1x → 11.3x → 9.8x
- PBR: 1.1x → 1.0x → 0.9x → 0.9x
- EV/EBITDA: 5.9x → 5.1x → 4.3x → 3.6x
- ROE: 8.2% → 7.4% → 8.7% → 9.2%
- EPS: KRW 8,258 → KRW 8,641 → KRW 10,792 → KRW 12,430
- Quarterly Performance & Outlook:
- 1Q25 Review: Operating Profit recorded KRW 200.5 Billion (YoY +9%), matching consensus. MLCC revenue across IT, automotive, and server applications grew over 10% QoQ each. Shipment volume rose +15% QoQ with estimated ASP down -3% QoQ; inventory days contracted to 4 weeks. Camera module operating profit reached ~KRW 50 Billion, while package substrates were temporarily impacted by customer inventory adjustments.
- 2Q25 Preview: Projected Operating Profit of KRW 215.3 Billion (YoY +2%, consensus KRW 217.5 Billion).
🚀 2. [Market Opportunities & Business Outlook]
- Component (MLCC) Tight Supply & Structural Upgrades:
- While legacy IT (PC, mobile) recovery remains gradual, China’s trade-in subsidies (~30% regional revenue exposure) and solid demand for high-value MLCCs sustain moderate recovery.
- MLCC content per unit is expanding exponentially in AI servers and autonomous vehicles; the limited number of qualified makers capable of supplying ultra-small, high-capacity MLCCs keeps market supply-demand tight.
- Package Substrate (FC-BGA) Client Expansion:
- Demand from AI accelerator investments is broadening the customer base from traditional semiconductor players to server companies.
- Expanding product supply beyond PC and server applications into global AI and ASIC designers.
- Optics Solutions & Next-Generation Growth Engines:
- ADAS/Autonomous Cameras: Key client roster secured across North American, Chinese, and European automotive OEMs.
- Silicon Capacitors: Upgrading passive components to support higher integration and performance requirements in next-gen IT devices.
- Glass Substrates: Actively developing advanced glass packaging materials in close collaboration with group affiliates for enhanced semiconductor thermal management.
📝 Editor’s Comment (Perspective)
The analyst views Samsung Electro-Mechanics not as a generic hardware vendor constrained by the gradual recovery of consumer electronics, but as an advanced component enterprise demonstrating differentiated operational resilience through deep exposure to AI servers and autonomous automotive electronics. Greater significance is attached to the company’s oligopolistic capabilities in high-capacity MLCCs, the expansion of its FC-BGA customer base into global AI/ASIC players, and group-wide collaboration on next-generation glass substrates rather than short-term substrate recovery pacing.
To verify whether this investment thesis materializes going forward, investors should monitor whether 2Q25 operating profit meets the projected KRW 215.3 Billion alongside disciplined 4-week MLCC inventory levels, whether FC-BGA substrate shipments to global AI accelerator and custom ASIC server accounts expand as anticipated, and whether development milestones for silicon capacitors and glass substrates progress on schedule. 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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