[Click eStock] "Samwha Capacitor, Passing the Worst Phase... Gradual Recovery in June"

[Asia Economy Reporter Oh Ju-yeon] SK Securities maintained its 'Buy' rating on Samhwa Capacitor on the 9th, stating that the company has passed through the worst phase in April and May and will show a gradual recovery from June. The target price was raised from 55,000 KRW, suggested in December last year, to 68,000 KRW. As of the closing price on the 8th, Samhwa Capacitor's stock price was 58,400 KRW.

According to SK Securities, Samhwa Capacitor's core component, MLCC, is supplied diversely with 30% to display and home appliances, 30% to automotive electronics, 25% to industrial applications, and 15% to others.

Researcher Lee Dong-joo said, "Although the mobile sector accounts for almost none, due to the general-purpose nature of IT, it is directly affected by industry changes like other competitors. It is estimated that shipments were quite sluggish in April and May due to the recent sharp decline in Tech demand, but mobile demand in June is expected to increase by 30% compared to the previous month, marking a short-term recovery turning point." He also anticipated that customers would proactively accumulate inventory in preparation for MLCC demand recovery.

The positive monthly indicators of Yageo, a Taiwanese MLCC company, are also encouraging.

Lee said, "Yageo's sales in May recorded the highest in 16 months, thanks to healthy inventory levels and expanded orders from customers in the Greater China region." He analyzed, "Although there are differences in customers and supplied products between Yageo and Samhwa Capacitor, the recovery in mobile MLCC shipments is expected to have a positive spillover effect on IT general-purpose MLCC as well," diagnosing that Samhwa Capacitor's performance will gradually improve.

However, further monitoring of actual demand is necessary, and price-centered volume competition among set manufacturers may have somewhat negative effects on downstream component suppliers.

Researcher Lee emphasized, "It is time to focus on the gradual recovery starting from June rather than concerns about demand sluggishness after COVID-19."

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