Brokerage : Hana Securities
Analyst : Kim Min-kyung (minkyung.kim@hanafn.com)
Investment Rating : BUY (Maintained)
Target Price : KRW 3,000,000 (Raised)
Core Momentum : Steep multi-year earnings growth through 2028 driven by acute supply shortages and strengthened pricing power in AI data center MLCCs and FCBGA substrates
📊 1. [Valuation & Key Financial Metrics]
- Rating & Target Price: BUY (Maintained) / Target Price KRW 3,000,000 (Raised) (Closing price KRW 2,184,000 as of June 30, 2026)
- Valuation Methodology: Applied a Target P/E multiple of 60.73x to 2028(E) EPS of KRW 49,950 (reflecting a 40% premium over Ibiden’s 2028(E) P/E, supported by worsening MLCC and FCBGA supply shortages, effective capacity contractions, stronger supplier pricing power, and high-value product mix improvements)
- Key Financial Metrics & Forecast:
- Revenue (KRW): 2024 KRW 10.2941 Trillion → 2025 KRW 11.3145 Trillion → 2026(E) KRW 13.4274 Trillion → 2027(E) KRW 16.0783 Trillion
- Operating Profit (KRW): 2024 KRW 735.0 Billion → 2025 KRW 913.3 Billion → 2026(E) KRW 1.7140 Trillion → 2027(E) KRW 3.3918 Trillion
- Net Profit (Controlling) (KRW): 2024 KRW 679.1 Billion → 2025 KRW 706.1 Billion → 2026(E) KRW 1.4283 Trillion → 2027(E) KRW 2.7237 Trillion
- EPS (KRW): 2024 KRW 8,752 → 2025 KRW 9,099 → 2026(E) KRW 18,406 → 2027(E) KRW 35,099
- Valuation Multiples (PER / PBR / ROE):
- 2024: PER 14.15x, PBR 1.08x, ROE 8.16%
- 2025: PER 28.03x, PBR 2.04x, ROE 7.70%
- 2026(E): PER 118.66x, PBR 15.21x, ROE 13.91%
- 2027(E): PER 62.22x, PBR 12.38x, ROE 22.20%
🚀 2. [Market Opportunities & Business Outlook]
- High-End MLCC Segment (Supplier-Dominant Market):
- Mega Contract Disclosed: Announced a ~KRW 450.0 Billion single contract to supply ultra-compact, high-capacitance MLCCs for AI data centers throughout 2027. Securing 2027 supply contracts at this juncture proves acute medium-to-long term supply anxieties among customers.
- Duopoly & Effective Capacity Contraction: High entry barriers limit ultra-compact, high-capacitance AI server MLCC supply to Murata and Samsung Electro-Mechanics. Allocating capacity to high-value AI lines accelerates the contraction of overall industry production capacity, sustaining tight conditions.
- FCBGA Segment (Pricing Power & Mix Enhancements):
- Structural Deficit: Severe capacity loss caused by semiconductor form-factor expansion (larger area and higher layer counts) is prolonging supply shortages for AI accelerators and server CPUs.
- Pricing & Margin Expansion: Strong pricing power is lifting ASPs across network, server, and even PC and automotive FCBGA segments, driving rapid profitability expansion. Top-tier substrate makers are also selectively receiving customer prepayments.
- High-Value Product Portfolio:
- Expansion in demand for silicon capacitors and embedded FCBGAs (with built-in passive components) reinforces high-margin product mix expansion.
📝 Editor’s Comment (Perspective)
The analyst views Samsung Electro-Mechanics not merely as a cyclical component maker exposed to IT demand swings, but as an indispensable global leader commanding industry pricing power and duopolistic dominance in core AI data center components (ultra-compact MLCCs and high-end FCBGAs). This perspective looks past short-term market noise to emphasize long-term earnings visibility underpinned by the KRW 450.0 Billion 2027 LTA pre-booking, acute capacity cannibalization across high-spec lines, and structural supplier-dominant pricing dynamics supporting a valuation premium.
To evaluate whether this investment thesis unfolds as anticipated, key verification checkpoints include the execution of the KRW 450.0 Billion 2027 AI server MLCC agreement and subsequent contract additions, the durability of ASP increases across server, PC, and automotive FCBGA lines, and revenue contributions from next-generation silicon capacitors and embedded FCBGA substrates. Progress on these fronts can be tracked via upcoming quarterly earnings releases, official investor relations disclosures, and 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.
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