[Click eStock] Samhwa Capacitor, Expectation for Driving System MLCC Supply

[Asia Economy Reporter Junho Hwang] KB Securities raised the target price of Samhwa Capacitor by 15% to 90,000 KRW on the 12th.

Samhwa Capacitor has so far supplied automotive MLCCs mainly for infotainment products (vehicle displays, navigation, etc.) to existing automotive customers such as LG Electronics and Hyundai Mobis.

Recently, news emerged that the company succeeded in supplying high value-added drive system MLCCs to major OEMs, raising expectations for sales growth through expanded sales to key customers like LG Electronics and diversification of drive system MLCC customers.

The proportion of automotive MLCC sales for Samhwa Capacitor was about 16% as of last year, and KB Securities expects this to rapidly increase to 27% by 2025 due to the high growth of the electric vehicle market and the related demand expansion.

Lee Changmin, a researcher at KB Securities, said, "The target price of Samhwa Capacitor was calculated using the Residual Income Model (RIM Valuation), and the market risk premium for this year was lowered from 7.37% to 7.16%, while the COE changed from 9.61% to 9.92%, which will act as downward pressure on the target price." However, he added, "With the rapid expansion of demand for automotive MLCCs due to the high growth of the electric vehicle market and automotive electrification, and Samhwa Capacitor's full-scale start of supplying high value-added automotive drive system MLCCs, related benefits are expected to expand."

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