Brokerage : Yuanta Securities
Analyst : Sunyoung Kou (sunyoung.kou@yuantakorea.com)
Investment Rating : BUY (Maintained)
Target Price : KRW 1,020,000 (Raised)
Core Momentum : Dual earnings growth engines driven by MLCC product mix upgrades and LTA demand visibility alongside a doubling of 2026 FC-BGA CapEx toward 2H26 full capacity utilization
📊 1. [Valuation & Key Financial Metrics]
- Rating & Target Price: BUY (Maintained) / Target Price KRW 1,020,000 (Raised by +85.5% from KRW 550,000) (Closing price KRW 832,000 as of April 30, 2026; upside potential 23%)
- Valuation Methodology: Target price raised to KRW 1.02M reflecting upward revisions in 2026 and 2027 earnings forecasts by +9% and +16%, respectively, along with target multiple upgrades
- Key Financial Metrics & Forecast:
- Revenue (KRW): 2024 KRW 10.294 Trillion → 2025 KRW 11.314 Trillion → 2026(E) KRW 13.361 Trillion → 2027(E) KRW 16.340 Trillion
- Operating Profit (KRW): 2024 KRW 735.0 Billion → 2025 KRW 913.0 Billion → 2026(E) KRW 1.561 Trillion → 2027(E) KRW 2.319 Trillion
- Net Profit (Controlling) (KRW): 2024 KRW 679.0 Billion → 2025 KRW 706.0 Billion → 2026(E) KRW 1.229 Trillion → 2027(E) KRW 1.847 Trillion
- Valuation Multiples (PER / PBR / ROE):
- 2024: PER 15.6x, PBR 1.2x, ROE 8.2%
- 2025: PER 17.5x, PBR 1.3x, ROE 7.7%
- 2026(E): PER 50.8x, PBR 5.5x, ROE 11.7%
- 2027(E): PER 33.8x, PBR 4.6x, ROE 14.7%
- 1Q 2026 Performance (1Q26P):
- Revenue KRW 3.2091 Trillion (+17% YoY, +11% QoQ), Operating Profit KRW 280.6 Billion (+39.9% YoY, 8.7% OPM).
- Excluding one-off retirement benefit expenses of KRW 71.4 Billion, normalized operating profit reached KRW 352.0 Billion, beating consensus by +29.6%.
- Component revenue reached KRW 1.4085 Trillion (+16% YoY, +7% QoQ) and Package revenue reached KRW 725.0 Billion (+45% YoY, +12% QoQ), both exceeding broker estimates.
- 2Q 2026 Outlook:
- Operating profit forecast at KRW 373.3 Billion (+75% YoY, +33% QoQ), poised to beat market consensus (KRW 352.0 Billion).
🚀 2. [Market Opportunities & Business Outlook]
- Component Division (MLCC Mix Enhancements & LTA Visibility):
- High fab utilization in the low 90% range (expected mid-90% in 2Q) paired with lean inventory levels near 4 weeks.
- Balanced growth across IT, industrial, and automotive segments, with AI server expansion lifting blended ASPs.
- Ongoing MLCC LTA discussions securing over 1 year of solid demand visibility.
- Package Solutions Division (CapEx Doubling & 2H26 Full Utilization):
- New shipments of switch substrates for North American network applications starting in 2Q26, sustaining mid-to-high 90% utilization.
- 2026 CapEx doubled YoY specifically to address surging substrate demand, supporting expectations of reaching 100% full capacity in 2H26.
- Customer diversification and optimistic post-2028 demand justify a structural valuation premium over standalone MLCC peers.
📝 Editor’s Comment (Perspective)
The analyst views Samsung Electro-Mechanics not as a single-product supplier, but as a premier hardware platform firing on “two growth engines”—MLCC mix upgrades with multi-year LTAs and FC-BGA substrate expansion into North American network platforms. This perspective looks past the 1Q26 one-off retirement expenses (KRW 71.4 Billion) to highlight the underlying operating earnings power (KRW 352.0 Billion), the doubling of 2026 substrate CapEx to capture structural shortages, and justified multiple expansion supported by upwardly revised 2026–2027 earnings forecasts.
To evaluate whether this investment thesis unfolds as anticipated, key verification checkpoints include delivering consensus-beating operating profits in 2Q26 (~KRW 373.3 Billion), monitoring the ramp-up of new North American network switch FC-BGA shipments, tracking the quarterly execution of the doubled 2026 CapEx plan, and formalizing multi-year MLCC LTAs. Progress on these fronts can be tracked via upcoming quarterly earnings announcements, investor relations presentations, and official 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.
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.
Contact: Compliance and Copyright Inquiries (ksb220805@gmail.com)
