Samsung Electro-Mechanics Down KRW 400,000, Yet Securities Firm Says It Could Still Reach KRW 2.8 Million

[Financial News] Daishin Securities maintained its “buy” rating and KRW 2.8 million target price for Samsung Electro-Mechanics, even though the stock has fallen by approximately KRW 400,000 since the firm first set the target price at KRW 2.8 million in July. The company is expected to post third-quarter results above market consensus and show standout strength within the sector.
Daishin Securities analyst Park Kang-ho said on the 3rd, “Samsung Electro-Mechanics’ third-quarter operating profit is expected to reach KRW 636.3 billion, up 144.5% from the same period last year.” He added, “This is expected to exceed the previous estimate of KRW 613 billion and the market consensus of KRW 596 billion.”
Earlier, on July 6, Park raised Samsung Electro-Mechanics’ target price from KRW 2.4 million to KRW 2.8 million. Samsung Electro-Mechanics closed at KRW 1.828 million that day, but had fallen 23.41% from the previous day’s KRW 1.4 million.
Park forecast that strong third-quarter results could drive Samsung Electro-Mechanics’ share price despite its recent weakness. The outlook is based on expectations that sales of high-value products for Artificial Intelligence (AI) servers and data centers—Flip Chip Ball Grid Array (FC-BGA) and Multilayer Ceramic Capacitor (MLCC)—will increase more than expected.
Park explained, “The upward revision to third-quarter operating profit is a differentiated investment factor compared with downward earnings forecasts for other IT companies.” He continued, “For FC-BGA, rising demand for AI semiconductors and limits on supply growth are driving higher prices and an increasing share of long-term supply contracts. For MLCC, average selling prices (ASP) continue to rise, led by AI and data-center demand. As a result, the possibility of further price increases has grown compared with before.”
He added, “The increased likelihood of price increases for MLCC, following FC-BGA, is why we selected Samsung Electro-Mechanics as our top pick among large IT companies.” He forecast, “The mix effect from rising AI- and data-center-related sales and growth in high-value products is expected to continue expanding through next year. Demand will exceed expectations as hyperscalers increase capital expenditures and big tech companies expand production of their own AI chips.”
[email protected] Lim Sang-hyeok Reporter