"Could Reach 3 Million Won" Samsung Electro-Mechanics Down 41% from Previous High Despite Record Earnings... Doosan Target Price Raised to 2.75 Million Won [Jutopia]

[Financial News] On the morning of September 18, we bring you a roundup of reports from major securities firms.
Despite expectations that Samsung Electro-Mechanics will post record-high third-quarter earnings amid a supercycle boom in key components for AI servers, its stock has fallen 41% from its previous high. Analysts say the current level presents a buying opportunity.
Doosan's target price was raised after sales of copper clad laminate (CCL) for optical transceivers are expected to triple in the second half of the year. The company is also expanding on a scale equivalent to building another entire electronics business and has decided to cancel all of its treasury shares. Korea Electric Power Corporation (KEPCO) saw its target price lowered because of higher fuel costs resulting from surging oil prices, but analysts said potential catalysts include a recovery in nuclear power utilization and the establishment of a basis for raising electricity rates.
◆ Samsung Electro-Mechanics (009150)— KB Securities / Researcher Lee Chang-min
- Target price: 3 million won (maintained) | Previous day's closing price: 1.33 million won
- Investment opinion: Buy (maintained)
KB Securities maintained its 3 million won target price for Samsung Electro-Mechanics, saying that the market for AI server MLCCs and Flip Chip Ball Grid Array (FC-BGA) substrates remains in a supercycle boom while the stock is undervalued relative to its earnings. The brokerage projected that third-quarter operating profit would rise 154% year on year, setting another record high.
Researcher Lee Chang-min analyzed, "The reason an earnings surprise is expected is, once again, the strong performance of products for AI servers. The effects of full-capacity operation, price increases, and an improved product mix for MLCCs and FC-BGAs continue to drive earnings higher."
By June 19, the stock had fallen 41% from its previous high. During the same period, three long-term MLCC supply contracts with U.S. big-tech companies were announced, while long-term contracts for substrates that include advance payments and profit-protection clauses are also expected.
Lee said, "Samsung Electro-Mechanics is enjoying the strongest AI-related benefits in the electrical and electronics sector, and its stock is expected to trend upward going forward. Therefore, the current level is considered a buying opportunity. ※Multilayer Ceramic Capacitor (MLCC)These are tiny components that regulate the flow of current in circuits by storing electricity and releasing it as needed. Hundreds to thousands are used in a single smartphone, while tens of thousands are used in AI servers, earning them the nickname "the rice of the electronics industry."※Flip Chip Ball Grid Array (FC-BGA)This is a high-value substrate that connects semiconductor chips to mainboards. Because the chip is flipped over and attached with tiny solder balls, the method enables faster signal transmission and better heat dissipation. It is a key component in high-performance semiconductors such as AI CPUs and GPUs.
◆ Doosan (000150)— DS Investment & Securities / Researcher Kim Soo-hyun
- Target price: 2.75 million won (raised 14.6%; previous target: 2.4 million won) | Previous day's closing price: 1.405 million won
- Investment opinion: Buy (maintained)
DS Investment & Securities raised its target price for Doosan to 2.75 million won, citing the explosive growth of its CCL business for optical transceivers, along with a large-scale expansion and the decision to cancel all treasury shares.
Researcher Kim Soo-hyun said, "Revenue from CCL for optical transceivers totaled approximately 80 billion won in the first half, more than ten times higher than a year earlier. With demand recently surging explosively, revenue is expected to reach 220 billion won in the second half, roughly three times the first-half figure." The margin for optical module-related operations is estimated at around 20% and could improve further because of supply bottlenecks and higher specifications.
Regarding the 968.4 billion won investment decision announced the previous day, the analyst assessed that it was on a scale equivalent to creating an entirely new Electronics BG (business group). Kim explained, "The company has decided on an expansion large enough to create another Electronics BG (business group). Operations are scheduled to begin in 2028–2029, and including the expansion of two lines in Thailand announced earlier this year, a total of 35 additional lines will be brought online."
Kim added that the decision to cancel all treasury shares, worth approximately 3 trillion won at market value, has led the market to view Doosan as the most proactive holding company in returning value to shareholders and enhancing corporate value.※Copper Clad Laminate (CCL)This is a substrate base made by coating a thin layer of copper onto an insulating resin board. Circuits are etched onto it to produce printed circuit boards (PCBs), making it the starting material for server and network equipment boards. Higher-grade products with lower signal loss are more expensive.※Optical transceiverThis communications component converts electrical signals into light for transmission through optical fiber, then converts received light back into electrical signals. Optical transceivers are essential for connecting the many servers and GPUs in AI data centers at ultrahigh speeds.
◆ Korea Electric Power Corporation (KEPCO) (015760)— Hyundai Motor Securities / Researcher Shin Dong-hyun
- Target price: 43,000 won (lowered 18.9%; previous target: 53,000 won) | Previous day's closing price: 31,000 won
- Investment opinion: Buy (maintained)
Hyundai Motor Securities lowered its target price for KEPCO to 43,000 won, saying that surging oil prices would increase its fuel-cost burden, but maintained its Buy rating. It also cut its operating profit forecast for this year by more than 8%.
Researcher Shin Dong-hyun explained, "The fuel-cost burden has increased as the share of nuclear power in the generation mix has declined and low nuclear power utilization has continued. As rising oil and liquefied natural gas (LNG) prices are expected to put upward pressure on fuel costs in the second half, a rapid recovery in nuclear power utilization is necessary."
In other words, KEPCO is using more expensive LNG power instead of cheaper nuclear power, and the surge in oil prices has compounded the cost burden.
However, the analyst expected nuclear power to lead an improvement in earnings in the second half. Shin analyzed, "Nuclear power utilization could rebound as the new Saeul Unit 3 begins operations and long-running preventive maintenance at existing nuclear power plants comes to an end."※Generation MixThis refers to the composition of electricity generation by source, including nuclear power, coal, LNG, and renewable energy. Nuclear power has the lowest fuel costs, while LNG is more expensive, so a higher share of nuclear power reduces the cost KEPCO pays to purchase electricity.

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