"Samsung Electro-Mechanics, Top Pick in IT Components Sector... Target Price Raised to 2.2 Million Won" [Click eStock]
KB Securities Raises Target Price from 1.6 Million Won to 2.2 Million Won
On May 28, KB Securities maintained its "Buy" investment opinion on Samsung Electro-Mechanics and raised its target price from 1.6 million won to 2.2 million won.
Yeonsu Kim, a researcher at KB Securities, recently stated, "We have revised upward our operating profit estimates for the next five years, considering that multilayer ceramic capacitors (MLCC) are entering a boom phase and the growth potential for the packaging substrate business is expanding."
Kim explained that the component industry for artificial intelligence (AI) is experiencing an unprecedented super boom. He added, "Samsung Electro-Mechanics is the only global company that is a leader in both MLCC and packaging substrates, which are core AI components." He also commented that explosive earnings growth is expected, driven by the high growth of both markets and improvements in the product mix.
!["Samsung Electro-Mechanics, Top Pick in IT Components Sector... Target Price Raised to 2.2 Million Won" [Click eStock]](http://www.asiae.co.kr/news/img_view.htm?img=2026052715595778508_1779865196.jpg)
In particular, Kim emphasized that MLCC has entered a price increase phase, and since this segment has previously posted operating margins exceeding 40%, a strong trend of profitability improvement is anticipated. He also mentioned that the recently announced 1.5 trillion won order for silicon capacitors is expected to see steep growth. For packaging substrates, the combination of production line expansions in Vietnam and Korea, along with rising prices, is expected to lead to performance growth that surpasses market expectations.
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Kim further stated, "The contribution to earnings from glass substrates, which will begin mass production in the second half of next year, is also expected to gradually expand. Ultimately, embedded substrates containing internal MLCC or silicon capacitors will become a unique product exclusive to Samsung Electro-Mechanics and are expected to establish themselves as core AI components."
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