Brokerage : Yuanta Securities
Analyst : Sunyoung Kou (Research Assistant: Seokmin Lim)
Investment Rating : BUY (Maintained)
Target Price : KRW 2,800,000 (Raised)
Core Momentum : Long-term earnings visibility and valuation premium expansion powered by simultaneous up-cycles across MLCC and FC-BGA alongside customer-backed mega CapEx expansions
📊 1. [Valuation & Key Financial Metrics]
- Rating & Target Price: BUY (Maintained) / Target Price KRW 2,800,000 (Raised from KRW 2,200,000, +27.3%) (Closing price KRW 1,648,000 as of July 7, 2026; upside potential 70%)
- Valuation Methodology: Applied a Target P/E multiple of 72.8x to 2027(E) EPS (15% premium over Ibiden’s 2027(E) P/E, reflecting superior growth diversity and durability from simultaneous MLCC and FC-BGA up-cycles)
- Operating Profit Forecast Upgrades:
- 2026 and 2027 operating profit forecasts raised by +3% and +19%, respectively
- 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 18.190 Trillion
- Operating Profit (KRW): 2024 KRW 735.0 Billion → 2025 KRW 913.0 Billion → 2026(E) KRW 1.613 Trillion → 2027(E) KRW 3.573 Trillion
- Net Profit (Controlling) (KRW): 2024 KRW 679.0 Billion → 2025 KRW 706.0 Billion → 2026(E) KRW 1.319 Trillion → 2027(E) KRW 2.885 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 93.8x, PBR 10.1x, ROE 12.1%
- 2027(E): PER 42.8x, PBR 7.8x, ROE 20.4%
- 2Q 2026 Forecast (2Q26E):
- Revenue: KRW 3.240 Trillion (+16.4% YoY, +1.0% QoQ)
- Operating Profit: KRW 418.0 Billion (+96.1% YoY, +48.9% QoQ, OPM 12.9%, beating consensus of KRW 391.0 Billion by +6.9%)
- Net Profit (Controlling): KRW 332.0 Billion (+155.8% YoY, +33.2% QoQ)
🚀 2. [Market Opportunities & Business Outlook]
- Segment Operational Drivers (2Q26E):
- Component (MLCC): Rising mix of high-value server products driving blended ASP growth.
- Package Solutions (FC-BGA): Operating leverage accelerating via ASP expansion and higher server revenue exposure.
- Optics: Relatively sluggish demand, but minimal impact on consolidated earnings.
- Order Momentum & Qualitative CapEx Shift:
- MLCC Orders: Building on the KRW 1.55 Trillion silicon capacitor order, an additional KRW 450.0 Billion AI server MLCC contract was disclosed, proving the structural transition of MLCCs from commodity consumables into LTA-based critical hardware.
- Mega Expansion: Recently disclosed investments in Sejong (KRW 0.8 Trillion) and Busan (KRW 1.5 Trillion) represent an unprecedented scale compared to historical annual CapEx of ~KRW 1 Trillion. Inflows of client co-funding signify a qualitative leap beyond basic CapEx spending.
- Supply-Demand & Pricing Dynamics:
- High order backlogs, lean inventories, and proactive Big Tech capacity bookings provide increasing visibility for broader price increases.
📝 Editor’s Comment (Perspective)
The analyst views Samsung Electro-Mechanics not as a cyclical supplier exposed to single-product volatility, but as an advanced hardware platform whose simultaneous up-cycles in MLCC and FC-BGA generate superior earnings growth and durability compared to single-segment global peers. This perspective emphasizes the structural strengthening of earnings visibility achieved through monthly disclosures of large-scale orders and customer-co-funded mega CapEx expansions.
To evaluate whether this investment thesis unfolds as anticipated, key verification checkpoints include achieving consensus-beating results in 2Q26, the sequential revenue recognition of disclosed silicon capacitor and AI server MLCC contracts, progress on Sejong (KRW 0.8 Trillion) and Busan (KRW 1.5 Trillion) facility expansions alongside client capital execution, and the broadening of channel price hikes into direct contracts. Progress on these factors can be tracked via upcoming quarterly earnings announcements, investor relations materials, and periodic regulatory filings.
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Source: This content has been structured and newly written based on officially disclosed financial facts and data from brokerage reports.
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