[Click eStock] "Samsung Electro-Mechanics, Better-than-Expected Q2... Improved Earnings Visibility in H2"

Hana Securities analyzed on the 1st that Samsung Electro-Mechanics' second-quarter earnings were better than expected, increasing visibility for the second half performance. They maintained a 'Buy' investment rating and a target price of 200,000 KRW.

Kim Rok-ho, a researcher at Hana Securities, stated, "The second-quarter earnings saw a significant increase in sales of multilayer ceramic capacitors (MLCC) and package substrates," adding, "In the third quarter, MLCC will drive the company's overall performance, with component sales expected to increase by 12% compared to the previous quarter." He also noted, "As supply of central processing units (CPU) and graphics processing units (GPU) for servers to major overseas clients expands, demand for flip chip ball grid array (FCBGA) is also expected to be strong," and forecasted, "Profitability of the business division will improve through the expansion of relatively profitable FCBGA sales."

Furthermore, Researcher Kim mentioned that following AI servers in the first half, benefits related to on-device AI are expected in the second half. He analyzed, "Although there was no earnings surprise, attention should be paid to the improvement in the quality of business division performance and clear direction due to AI benefits." He added, "The current stock price is at the historical price-to-book ratio (PBR) band average level, so there is no valuation burden, and as AI benefits expand, there will be opportunities to attempt the upper end of the band at certain times."

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