"Samsung Electro-Mechanics Could Hit 3 Million Won... MLCCs and Substrates Are Selling Faster Than They Can Be Made"... KT&G Reassessed on Overseas Sales Growth and Expanded Shareholder Returns [Zootopia]

[The Financial News] Here is a roundup of major brokerage reports for the morning of June 19.
Samsung Electro-Mechanics is expected to enjoy a super boom for more than two years, as demand for multilayer ceramic capacitors (MLCC) and packaging substrates for artificial intelligence servers is projected to far outstrip supply.
KT&G Corporation is expected to be revalued as overseas cigarette sales surge and the company moves to cancel all treasury shares this year and announce a new dividend policy. Korean Air was also seen as benefiting from faster-than-expected declines in oil prices and the confirmation of the Asiana Airlines merger date, which has improved investor sentiment.
◆Samsung Electro-Mechanics (009150)― KB Securities / Analyst Lee Chang-min
- Target price: 3 million won (up 36.4% from 2.2 million won) | Previous close: 2.2 million won
- Investment opinion: Buy (maintained)
KB Securities raised its target price for Samsung Electro-Mechanics to 3 million won, saying the outlook for MLCCs and packaging substrates remains undervalued, and kept the stock as its top pick in the IT components sector.
Analyst Lee Chang-min said, "The trend toward higher specifications in products such as Graphics Processing Units (GPU) architectures and Application-Specific Integrated Circuits (ASIC) is boosting demand for MLCCs and packaging substrates, but supply growth will remain far below demand growth for more than the next two years."
He added, "This is because the trend of more than doubling the number of units mounted per server rack for both MLCCs and packaging substrates is expected to continue for now, while only a limited number of companies have the capability to produce high-capacity MLCCs and large-area packaging substrates for AI servers, and yields are low, so supply is increasing only slowly." The imbalance between supply and demand is expected to last for more than two years, leading to higher selling prices and upward revisions to earnings forecasts.
◆KT&G Corporation (033780)― DS Investment & Securities / Analyst Jang Ji-hye
- Target price: 240,000 won (up 14.3% from 210,000 won) | Previous close: 180,400 won
- Investment opinion: Buy (maintained)
DS Investment & Securities raised its target price for KT&G Corporation to 240,000 won, saying the stock is likely to be revalued on the back of rising overseas sales and expanded shareholder returns.
Analyst Jang Ji-hye explained, "KT&G's recent earnings growth has been driven by its overseas cigarette business." She added, "Overseas cigarette sales rose from 602.8 billion won in 2020 to 1.88 trillion won in 2025, representing a compound annual growth rate (CAGR) of 26%, and the share of overseas sales in cigarette revenue increased from 26% to 54% over the same period."
The electronic cigarette segment, or NGP, was also cited as a growth driver. Jang said, "With advances in heated tobacco devices and the acquisition of a nicotine pouch company, KT&G is expanding its NGP category. Combined with cooperation with global partners and direct business expansion, this should support stronger overseas earnings growth."
Stronger shareholder returns are also drawing foreign capital. Jang noted, "As KT&G expands shareholder returns based on stable growth in overseas tobacco earnings, recent share purchases by global asset managers have continued, pushing foreign ownership of market capitalization to 51.2%."※ Next Generation Product (NGP)This refers collectively to electronic cigarettes, heated tobacco products, nicotine pouches and other products that replace conventional cigarettes.
◆Korean Air (003490)― iM Securities / Analyst Bae Se-ho
- Target price: 40,000 won (up 17.6% from 34,000 won) | Previous close: 28,850 won
- Investment opinion: Buy (maintained)
iM Securities raised its target price for Korean Air to 40,000 won, saying investor sentiment is improving as the downward trend in oil prices is faster than expected and the merger date with Asiana Airlines has been confirmed.
Analyst Bae Se-ho said, "Even with the sharp rise in oil prices in the second quarter this year, the company is expected to stand out for its ability to defend earnings, as it has passed on the increase to passenger and cargo fares better than its rivals." He added, "This trend is likely to remain valid in the third quarter as well." The analysis suggests that although the company will face headwinds from higher oil prices in the second quarter, earnings could rebound in the third quarter if oil prices continue to fall.
Expectations for merger synergies have also become more concrete. Bae said, "Conservatively, the merger is expected to add 300 billion to 400 billion won in operating profit annually, and we recommend buying the stock because the visibility of value creation is very high." With the merger date with Asiana Airlines set for Dec. 16, full-scale synergies are expected to begin showing up in earnings next year.

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