[Click eStock] "Samsung Electro-Mechanics Expected to Exceed Market Expectations in Q2 Earnings"

[Asia Economy Reporter Park Jihwan] Kiwoom Securities on the 29th stated that Samsung Electro-Mechanics met market expectations for its first-quarter earnings this year, and despite the seasonal decline in the second quarter, performance is still expected to be better than anticipated. Accordingly, they issued a 'Buy' investment rating with a target price of 270,000 KRW.

Researcher Kim Jisan of Kiwoom Securities said, "Amid strong demand for untact devices, multilayer ceramic capacitors (MLCC) and package substrates are leading the way," adding, "The stock market seems to be hoping for an absolute price increase in MLCC like the 2018 cycle, but the improvement in the mix focused on small, high-capacity products for mobile and the gradual profitability improvement trend alone can be evaluated as sufficiently good performance."

Samsung Electro-Mechanics' first-quarter operating profit increased by 99% year-on-year to 331.5 billion KRW, exceeding the market expectation of 316 billion KRW by about 15.5 billion KRW. MLCC sales exceeded expectations amid strong demand for untact devices such as PCs, and the package substrate business showed a favorable market condition.

Researcher Kim explained, "MLCC saw an improved product mix as shipments of 5G mobile and small, high-capacity PC products increased, supported by manufacturing efficiency improvements such as yield enhancement at overseas production bases." Among package substrates, FC-BGA sales for thin laptop CPUs expanded amid supply shortages,

and BGA saw price increases for FC-CSP and others due to the impact of competitor fires, according to the analysis.

Although the second quarter is seasonally a period when sales of camera modules and RF-PCBs decline, the gradual improvement trend in MLCC performance is expected to continue. Operating profit is estimated to increase by 206% compared to a year ago, reaching 293.7 billion KRW.

Researcher Kim said, "MLCC will also see customers' efforts to secure component inventory amid concerns over production disruptions in automotive and IT sets caused by non-memory semiconductors," adding, "The demand outlook for smartphones and PCs remains favorable." The new Tianjin plant is expected to start full-scale operation as early as the end of the second quarter, and the lineup for automotive electronics with enhanced high-temperature and high-pressure characteristics will also be expanded.

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