Brokerage : Yuanta Securities
Analyst : Sunyoung Kou (Research Assistant: Seokmin Lim)
Investment Rating : BUY (Maintained)
Target Price : KRW 2,300,000 (Maintained)
Core Momentum : Simultaneous expansion of price (P) and volume (Q) driven by spreading MLCC channel price hikes and customer-prepayment-backed server substrate capacity expansions
📊 1. [Valuation & Key Financial Metrics]
- Rating & Target Price: BUY (Maintained) / Target Price KRW 2,300,000 (Maintained) (Closing price KRW 1,274,000 as of August 10, 2026)
- Valuation Basis: Applied Target PER of 66.1x to 2027(E) EPS
- Key Financial Metrics & Forecast:
- Revenue (KRW): 2024 KRW 10.294 Trillion → 2025 KRW 11.314 Trillion → 2026(E) KRW 14.354 Trillion → 2027(E) KRW 18.379 Trillion
- Operating Profit (KRW): 2024 KRW 735.0 Billion → 2025 KRW 913.0 Billion → 2026(E) KRW 1.962 Trillion → 2027(E) KRW 3.673 Trillion
- Net Profit (Controlling) (KRW): 2024 KRW 679.0 Billion → 2025 KRW 706.0 Billion → 2026(E) KRW 1.412 Trillion → 2027(E) KRW 2.594 Trillion
- 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 67.7x, PBR 7.7x, ROE 12.8%
- 2027(E): PER 36.8x, PBR 6.1x, ROE 18.4%
- 2Q 2026 Preliminary Results (2Q26P):
- Revenue: KRW 3.457 Trillion (+24.2% YoY, +7.7% QoQ)
- Operating Profit: KRW 440.0 Billion (+106.8% YoY, +57.0% QoQ, OPM 12.7%)
- Net Profit (Controlling): KRW 313.0 Billion (+141.2% YoY, +25.6% QoQ)
🚀 2. [Market Opportunities & Business Outlook]
- MLCC Segment (Price Up-cycle Traction):
- Channel Price Hikes: Following a 10% price hike on low-end PC MLCCs in May, a broad 30% price hike across all product categories in distribution channels was enacted in July.
- Supply Bottleneck: Conversion of manufacturing lines toward high-end server MLCCs is accelerating commodity supply deficits. Tight supply is corroborated by high BB ratios across peers (Murata 1.47, Taiyo Yuden 1.72, Yageo 2.2).
- High-End AI Server Demand: Discussions for LTAs are underway with around 10 customers to secure ultra-high voltage and high-capacitance AI server components.
- Substrate Segment (Customer Prepayment-Backed CapEx):
- Big Tech Capex Drivers: Combined CapEx growth for North American Big Tech (GOOG, AMZN, MSFT, META) is forecast at +82.5% YoY in 2026 and +35.3% YoY in 2027.
- Downside Cushion: CapEx expansion in 2026 will be partially funded via customer prepayments, structurally boosting utilization stability and earnings predictability while acting as a shock absorber against future market cycle volatility.
📝 Editor’s Comment (Perspective)
The analyst views Samsung Electro-Mechanics not just as a standard component supplier exposed to consumer IT cycles, but as a critical infrastructure beneficiary leveraging server-led supply bottlenecks into pricing power while securing structural long-term growth via Big Tech prepayments. This perspective emphasizes a qualitative structural transformation where channel-driven price increases (P) and prepayment-backed capacity expansions (Q) simultaneously enhance earnings visibility and margin defensiveness.
To evaluate whether this investment thesis is playing out, key verification points include whether distribution channel price hikes successfully translate into long-term contract ASP increases across major OEM accounts, and whether customer-prepayment-funded substrate expansions ramp up on schedule to deliver high-margin server revenues. These developments can be monitored through future quarterly earnings releases, investor relations Q&A sessions, 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.
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