Brokerage : Shinhan Securities
Analyst : Kangho Oh (R.A Jibeom Seo)
Investment Rating : BUY (Maintained)
Target Price : KRW 2,000,000 (Raised)
Core Momentum : Structural multi-year earnings expansion and valuation re-rating driven by a KRW 1.6 Trillion silicon capacitor contract win, robust ASP growth, and shifting valuation base to 2028(E)
📊 1. [Valuation & Key Financial Metrics]
- Rating & Target Price: BUY (Maintained) / Target Price KRW 2,000,000 (Raised by +100% from KRW 1,000,000) (Closing price KRW 1,340,000 as of May 22, 2026; upside potential 49.3%)
- Valuation Methodology: Shifted valuation benchmark base to 2028, applying Target P/E multiple of 49.6x (raised by +20%, applying 2024–2025 historical High peer average across Murata, Ibiden, and Unimicron) to 2028(E) EPS of KRW 40,378
- Earnings Forecast Revisions (Previous vs. Revised):
- 2026(E): Revenue KRW 13.5975 Trillion (+0.5%), Operating Profit KRW 1.6035 Trillion (+2.2%), Net Profit KRW 1.3677 Trillion (+2.1%)
- 2027(E): Revenue KRW 16.8008 Trillion (+6.7%), Operating Profit KRW 2.9016 Trillion (+23.9%), Net Profit KRW 2.3421 Trillion (+23.4%)
- 2028(E): Revenue KRW 20.6603 Trillion (+12.7%), Operating Profit KRW 3.9118 Trillion (+30.5%), Net Profit KRW 3.1441 Trillion (+32.6%)
- Key Financial Metrics & Forecast:
- Revenue (KRW): 2024 KRW 10.2941 Trillion → 2025 KRW 11.3145 Trillion → 2026(E) KRW 13.5975 Trillion → 2027(E) KRW 16.8008 Trillion → 2028(E) KRW 20.6603 Trillion
- Operating Profit (KRW): 2024 KRW 735.0 Billion → 2025 KRW 913.3 Billion → 2026(E) KRW 1.6035 Trillion → 2027(E) KRW 2.9016 Trillion → 2028(E) KRW 3.9118 Trillion
- Net Profit (Controlling) (KRW): 2024 KRW 679.1 Billion → 2025 KRW 706.1 Billion → 2026(E) KRW 1.3677 Trillion → 2027(E) KRW 2.3421 Trillion → 2028(E) KRW 3.1441 Trillion
- Valuation Multiples (PER / PBR / ROE):
- 2024: PER 14.3x, PBR 1.1x, ROE 8.2%
- 2025: PER 28.3x, PBR 2.1x, ROE 7.7%
- 2026(E): PER 76.5x, PBR 9.7x, ROE 13.5%
- 2027(E): PER 44.6x, PBR 8.1x, ROE 19.9%
- 2028(E): PER 33.2x, PBR 6.7x, ROE 22.2%
🚀 2. [Market Opportunities & Business Outlook]
- Segmental Annual Performance Breakdown:
- Component Division:
- Revenue: 2025 KRW 5.1985 Trillion → 2026(E) KRW 6.5201 Trillion → 2027(E) KRW 8.8876 Trillion.
- Operating Profit: 2025 KRW 609.3 Billion (11.7% OPM) → 2026(E) KRW 1.0138 Trillion (15.5% OPM) → 2027(E) KRW 2.0806 Trillion (23.4% OPM).
- High capacity utilization above 90% driving operational leverage and product mix improvements.
- Substrate Division:
- Revenue: 2025 KRW 2.3018 Trillion → 2026(E) KRW 3.2656 Trillion → 2027(E) KRW 4.1343 Trillion.
- Operating Profit: 2025 KRW 135.2 Billion (5.9% OPM) → 2026(E) KRW 441.8 Billion (13.5% OPM) → 2027(E) KRW 689.0 Billion (16.7% OPM).
- Module Division:
- Revenue: 2025 KRW 3.8141 Trillion → 2026(E) KRW 3.8117 Trillion → 2027(E) KRW 3.7789 Trillion.
- Operating Profit: 2025 KRW 168.7 Billion (4.4% OPM) → 2026(E) KRW 147.9 Billion (3.9% OPM) → 2027(E) KRW 132.0 Billion (3.5% OPM).
- Component Division:
- Strategic Significance of Silicon Capacitor Contract (KRW 1.6 Trillion):
- Disclosed a KRW 1.6 Trillion silicon capacitor supply agreement on May 20.
- Crucial for AI GPU and ASIC power integrity, handling transient current spikes and efficiency requirements close to the chip die.
- Represents net-new high-value AI demand rather than commodity MLCC cannibalization; manufactured on separate lines, lifting 2027 Component revenue forecasts by +11%.
📝 Editor’s Comment (Perspective)
The analyst views Samsung Electro-Mechanics not as a cyclical volume (Q) follower, but as an indispensable high-value hardware platform capturing pricing power (P) and structural growth in an AI demand-exceeds-supply environment. This perspective emphasizes the validation of long-term demand via the KRW 1.6 Trillion silicon capacitor LTA, operating leverage from Component fab utilization above 90% (driving 2027 Component OPM to 23.4%), and justified valuation expansion utilizing 2028 forward metrics (Target P/E 49.6x applied to 2028(E) EPS of KRW 40,378).
To evaluate whether this investment thesis unfolds as anticipated, key verification checkpoints include the ramp-up and separate revenue recognition of the KRW 1.6 Trillion silicon capacitor supply, maintaining Component capacity utilization above 90% toward KRW 2.0+ Trillion in Component operating profit by 2027, and achieving mid-teens OPM in the Substrate division. 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.
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