"Up for 10 Consecutive Sessions..." Samsung Electro-Mechanics Target Price Raised from 600,000 to 860,000 Won [Click e-Stock]

iM Securities has raised its target price for Samsung Electro-Mechanics, which has been on a 10-day winning streak, from 600,000 won to 860,000 won.

According to iM Securities on April 22, the main reasons for the upward revision of the target price are the structurally tightening supply and demand of multilayer ceramic capacitors (MLCC), which are Samsung Electro-Mechanics' core products, and increasing long-term visibility for demand in flip chip ball grid array (FC-BGA) substrates.

Ko Eui-Young, a research analyst at iM Securities, stated in the report, "As MLCC delivery lead times are getting longer, even second-tier manufacturers are expected to approach full capacity starting from the second half of the year." He added, "The tight supply is highly likely to spread beyond artificial intelligence (AI) applications to the broader market." He further explained, "Given the expanding demand for AI applications and the significant increase in mass production difficulty, this situation is expected to become structurally entrenched."

The analyst also diagnosed that demand visibility for FC-BGA, a type of semiconductor substrate, has increased to the point where orders are being discussed three years in advance. Ko added, "Samsung Electro-Mechanics is expected to maintain full capacity operation at least until 2027, and further expansion to meet demand after that is inevitable."

Accordingly, the analyst presented operating profit estimates of 1.47 trillion won for 2026 and 2.56 trillion won for 2027. The 2027 estimate is a 14% increase compared to the previous forecast.

Ko said, "The consensus for 2027 operating profit has been raised by 22% in just one month to 2 trillion won, but even a scenario with a 10% increase in MLCC prices has not yet been reflected. The effect of higher package substrate prices has also not been factored in."

Recently, Samsung Electro-Mechanics’ stock price has continued to rally on expectations of earnings growth. On April 21, it closed at 772,000 won, up more than 13% from the previous session, setting a new all-time high.

Prior to iM Securities, Hana Securities, Meritz Securities, and Shinhan Investment Corp. also raised their target prices for Samsung Electro-Mechanics. Hana Securities suggested 810,000 won, while Meritz Securities and Shinhan Investment Corp. each presented 700,000 won.

Kim Minkyoung, a research analyst at Hana Securities, commented, "Entering an MLCC price increase cycle and intensifying supply constraints for FC-BGA are driving a mix improvement centered on high value-added products, which will lead to mid- to long-term profit growth." She added, "As demand, centered on AI servers, expands into the network and satellite sectors, both MLCC and FC-BGA have entered a phase of structural growth, which means the period of profit increase is expected to be prolonged."

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