[Edaily Reporter Kim Hyung-il ] SKSecurities maintained its “Buy (BUY)” investment rating and target price of 2 million won for SamsungElectroMechanics(009150), noting that the company posted second-quarter earnings that exceeded market expectations, driven by strong performance in the multilayer ceramic capacitor (MLCC) sector.

On the 31st, Park Hyung-woo, an analyst at SKSecurities, assessed that SamsungElectroMechanics’ second-quarter operating profit reached 440.4 billion won, a 107% increase year-over-year, surpassing the market consensus (406.1 billion won).

The improvement in earnings was driven by the MLCC business. MLCC performance exceeded expectations as both shipment volume and average selling price (ASP) rose to the high single-digit range, combined with an improved product mix and favorable exchange rate effects. The second-quarter capacity utilization rate also remained high at 95%, and analysts noted that a supply shortage (shortage) appears imminent. The camera module business also outperformed estimates, while the package substrate business met expectations.

The securities firm projected that the trend of improving performance would continue in the second half of the year. It estimated third-quarter operating profit at 600.5 billion won, a 131% increase compared to the same period last year. Accordingly, it revised upward its annual operating profit forecasts for this year and next year to 1.9 trillion won and 3.3 trillion won, respectively.

The firm also viewed the accelerating rise in MLCC prices as a positive development. It expects both MLCC shipment volumes and average selling prices (ASP) to continue their high-single-digit growth trend in the third quarter. In particular, it forecasts that this year’s average MLCC selling price will exceed 5 won per unit for the first time in seven years.

The firm also predicted that the flip-chip ball grid array (FCBGA) business would contribute to improved performance. It projected that third-quarter FCBGA revenue would increase by approximately 30% quarter-over-quarter, with profitability improving to the mid-to-high 20% range. The analysis noted that the current price increase is merely at the level seen during the early stages of past market recoveries, leaving room for further price hikes.

Researcher Park assessed, “Considering the component price hike cycle, synergies between passive components and embedded boards, and the growth potential of silicon capacitors, SamsungElectroMechanics is the top pick among large-cap IT hardware stocks.”