[Edaily Reporter kyoungeun kim ] IBK Investment & Securities announced on the 31st that SamsungElectroMechanics(009150)continues to set new record highs for its quarterly earnings, and that it is maintaining its “Buy” investment rating and target price of 1.75 million won.

Kim Un-ho, an analyst at IBK Investment & Securities, said, “SamsungElectroMechanics’ quarterly earnings are hitting record highs, and we expect this trend to continue through the end of the year,” adding, “While this was already anticipated, the scale and pace of improvement are greater and faster than previously forecast.” The target price represents an upside potential of approximately 99% compared to the previous day’s closing price (879,000 won).

Analyst Kim explained, “With continued announcements regarding demand, this indicates that the growth is not merely a one-time phenomenon,” adding, “Investment in artificial intelligence (AI) is not limited to memory; as chip volumes increase and performance improves, packages become thicker and larger in area.” He further noted, “Since the number of suppliers capable of meeting this demand is limited, we believe the company has entered a long-term growth trajectory.”

In particular, he stated, “The biggest driver behind SamsungElectroMechanics’ stock price rise is the expectation of price hikes for multilayer ceramic capacitors (MLCCs),” adding, “Price hikes were also the reason its operating profit margin rose to as high as 40% in the past.” He emphasized, “While price hikes are a natural consequence of supply and demand dynamics, they are uncommon in the MLCC industry,” adding, “This is because the leading manufacturer prioritizes its relationships with customers; the fact that it raised prices despite this indicates a supply shortage severe enough that even customers have no choice but to accept it.”

Regarding the target price, he explained, “The stock price has continued to decline since we raised our target price; this is due not only to the sluggish stock market but also to the fact that the previously high valuation has returned to a reasonable level,” adding, “SamsungElectroMechanics is the only company that produces both packages and MLCCs, and both products are core components for AI investments.”
He continued, “The pace of growth in revenue and operating profit is accelerating faster than expected, to the point where one might question whether the 5 trillion won operating profit target for 2028 is too conservative,” adding, “Now is the time to invest in this growth trajectory, as the market has already corrected sufficiently.”