[Click eStock] "Samsung Electro-Mechanics, Earnings Hit Bottom... Target Price Up"

Hana Securities announced on the 14th that it has raised the target price for Samsung Electro-Mechanics from 175,000 KRW to 185,000 KRW. The investment rating was maintained at 'Buy.'

Samsung Electro-Mechanics' sales for the first quarter of this year are expected to be 2.0184 trillion KRW, a 23% increase compared to the same period last year. Operating profit for the same period is estimated to have decreased by 66% to 139.3 billion KRW. Although overall IT demand weakness led to sluggish performance, it exceeded market expectations.

Hana Securities expects Samsung Electro-Mechanics' earnings bottomed out in the fourth quarter of last year (operating profit of 101.2 billion KRW), with gradual improvement in quarterly performance this year, followed by increased earnings in the second quarter and the second half due to demand recovery. Accordingly, the earnings forecasts for this year and next year have been revised upward. The company believes that the burden of inventory has significantly eased across the MLCC industry. It added that with Samsung Electro-Mechanics' rising operating rate, there is a high potential for further earnings upgrades in the future.

Kim Rok-ho, a researcher at Hana Securities, said, "Samsung Electro-Mechanics' stock price has risen 22% since the beginning of the year, outperforming the KOSPI with a solid return." He added, "From the second quarter onward, the generally low inventory levels in the MLCC industry and the resulting increase in Samsung Electro-Mechanics' operating rate make the possibility of earnings upgrades quite high." He further noted, "The Chinese smartphone market is expected to benefit from a base effect compared to the same period last year starting from the second quarter, which is also expected to positively impact investor sentiment and Samsung Electro-Mechanics' earnings."

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