"From 2.4 million won to 1.38 million won after a plunge, yet headed to 3 million won?" ... Retail Investors Sold This Stock First [Shareholder Club]

[Financial News] KB Securities forecast that Samsung Electro-Mechanics' third-quarter earnings would significantly exceed market consensus and maintained its Buy rating and 3 million won target price. In a report on Samsung Electro-Mechanics' earnings outlook released on the 18th, KB Securities analyst Lee Chang-min said, "Industry conditions are at record highs, but the stock is undervalued," reaching this assessment.

Samsung Electro-Mechanics shares rose 58,000 won, or 4.36%, from the previous day to close at 1,388,000 won, fueled by expectations for the company's earnings outlook. However, retail investors sold off large amounts of the stock, drawing attention to how investor sentiment will shift ahead of the Chuseok holiday.

Samsung Electro-Mechanics' third-quarter 2026 revenue was projected to rise 33% year on year to 3.83 trillion won, while operating profit was expected to increase 154% to 660.1 billion won. KB Securities explained that the operating profit consensus had been around 470 billion won just three months ago, but earnings expectations have been rapidly revised upward in a short period.
The strong performance is being driven by products for artificial intelligence (AI) servers. Multilayer Ceramic Capacitor (MLCC) and Flip Chip Ball Grid Array (FCBGA) products have entered full-capacity operation. Combined with price increases and an improved product mix, this has led to a sharp improvement in profitability.
The MLCC operating margin rose from 11.7% in the first quarter to 16.6% in the second quarter and is expected to reach 22.0% in the third quarter. The operating margin for packaging substrates is also projected to rise to 20.8% in the third quarter, following 7.6% in the first quarter and 13.6% in the second.
KB Securities also raised its full-year 2026 earnings estimates. Revenue was slightly lowered from 14.58 trillion won to 14.509 trillion won, while operating profit was raised 4.1% from 2.029 trillion won to 2.111 trillion won. Net income attributable to controlling shareholders was also increased 3.9%, from 1.543 trillion won to 1.604 trillion won. The 2027 operating profit estimate was raised 5.2% to 4.189 trillion won, which is 8.4% above market consensus.

KB Securities maintained Samsung Electro-Mechanics as its top pick in the IT components sector. The basis for its view is the gap between earnings and the share price. Samsung Electro-Mechanics shares have fallen 41% from their previous high of 2,254,000 won, recorded on June 19, even though the company's fundamentals have strengthened during the same period.
During this period, three long-term MLCC supply contracts with U.S. big tech companies were announced. With the shortage of packaging substrates also expected to persist, expectations are growing for long-term contracts on favorable terms, including advance payments and clauses protecting profitability. Lee said, "Key AI-related components such as MLCC and FCBGA are enjoying an unprecedented boom, and further improvement in industry conditions is expected. The recent share-price correction is therefore the result of excessive psychological concerns," adding, "The current market offers an opportunity to buy at lower prices."
Samsung Electro-Mechanics shares rose as much as 5% intraday, boosting expectations for its earnings outlook, but retail investors were net sellers of 287,502 shares. Investor sentiment among individuals ahead of the Chuseok holiday is also expected to be a factor.




[email protected] Kim Hee-sun Reporter