Samsung Electro-Mechanics Navigates Deepest Trough in Q2... Focus on Strong Rebound in Second Half

[Asia Economy Reporter Oh Ju-yeon] DB Financial Investment evaluated Samsung Electro-Mechanics, stating that although the camera module is significantly fluctuating to the extent that it is difficult to meet the operating profit consensus of around 100 billion KRW for the second quarter of this year, this difficult situation peaked in April-May and orders in June may show a gradual recovery, and currently it seems to be going through the deepest trough.

According to DB Financial Investment on the 31st, Samsung Electro-Mechanics' camera module sales in the second quarter of this year are expected to decrease by 40-50% compared to the previous quarter, significantly lower than expected, and profits are expected to remain around the break-even point (BEP).

Researcher Kwon Seong-ryul explained, "The RF PCB (printed circuit board) in the substrate division is also in the off-season and is for smartphones, so a decline in performance compared to the first quarter is inevitable."

It is analyzed that the main product, MLCC (Multi-Layer Ceramic Capacitor), is holding up well. Researcher Kwon said, "Despite difficulties, MLCC prices and volumes remain firm," adding, "Compared to the past when it was sensitive to the economy and fluctuated wildly, demand for servers, PCs, and communication base stations is good, and there are many constraints on supply increases, so a serious supply-demand imbalance is not occurring. Rather, MLCC inventory has fallen below appropriate levels, increasing the need to replenish stock, which has the effect of lowering cost of sales from the third quarter onward."

He mentioned, "Moreover, when demand recovers in the second half of the year, sales growth can be more elastic, so MLCC profitability in the second half may exceed expectations."

Researcher Kwon emphasized, "Since there is almost no expectation for second-quarter performance, even if poor results actually come out and the cause is the module, the impact on the stock price will be limited," and added, "Rather, a strategy that places more weight on the possibility of a sharp rebound in performance in the second half and the upside potential of MLCC is necessary."

This content was produced with the assistance of AI translation services.