[Click eStock] "Samsung Electro-Mechanics with 'Sales Diversification,' Target Price Maintained"

Daishin Securities maintained a buy rating and a target price of 170,000 KRW for Samsung Electro-Mechanics on the 24th, stating, "Along with sales diversification, we expect an upward stock price trend in the semiconductor and electrical electronics sectors starting January next year." The closing price on the previous day was 128,200 KRW.

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On the same day, Kangho Park, a researcher at Daishin Securities, said, "We maintain our top sector pick for the first half of next year. The stock price rose 14.5% over the past month, showing a differentiated trend compared to large semiconductor and information technology (IT) companies."

The most notable aspect is sales diversification. Researcher Park stated, "Next year, the qualitative changes in the portfolio pursued over the past three years will become visible and lead to improved performance," adding, "The sales structure centered on smartphones will expand to automotive equipment, artificial intelligence (AI), and robot-related sales. This will lead to a revaluation of the valuation (stock price relative to corporate value) next year."

China's push for domestic demand-driven economic stimulus is also an encouraging factor. Researcher Park pointed out, "There is a possibility of subsidies for some IT devices through increased production and sales promotion of IT equipment," and "We expect benefits from increased demand for multilayer ceramic capacitors (MLCC) focused on ultra-small, high-capacity types."

He further stated, "Samsung Electro-Mechanics is expected to record sales of 10.17 trillion KRW this year for the first time, and next year, sales are estimated to increase by 5.1% to 10.7 trillion KRW," adding, "Operating profit is also expected to grow by 18.6% to 758.5 billion KRW this year compared to last year, marking a transition from the negative growth of 2022 and last year to growth."

He emphasized, "In particular, by establishing a diverse portfolio including high voltage and high temperature in the automotive equipment sector, market share expansion is expected to accelerate compared to before," and added, "Optical solutions (cameras) are expanding sales centered on Tesla, and portfolio diversification into the robot sector is expected to actively proceed in the future."

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