KB Securities analyzed on the 5th that Samsung Electro-Mechanics is expected to show strong performance due to the growth of the electric vehicle market and strong demand for artificial intelligence (AI) server components in the second quarter. The target stock price is 200,000 won, and the investment opinion remains 'buy.'
Samsung Electro-Mechanics' expected revenue for the second quarter this year is estimated at 2.74 trillion won, with an operating profit of 222.5 billion won. This represents an increase of 6% and 7%, respectively, compared to the same period last year.
The improvement in second-quarter performance stems from the increased demand for AI and electric vehicle components. The demand for high-value-added components such as MLCCs for AI servers and packaging substrates continues to show an increasing trend. With the growth of the electric vehicle market and the expansion of Advanced Driver Assistance Systems (ADAS), sales of MLCCs for automotive use are also on the rise. In particular, demand from China is rapidly increasing, and Samsung Electro-Mechanics supplies MLCCs to major electric vehicle manufacturers, including BYD.
Lee Chang-min, a researcher at KB Securities, noted, 'We maintain a top-pick perspective on the IT components sector for Samsung Electro-Mechanics,' adding that 'the portfolio is being improved from products with stagnant growth such as smartphones and computers to high-growth products like AI and electric vehicles.'
'Furthermore, the expansion of AI-related investments is broadening sales of components aimed at high-value industries such as servers and networks,' he added. 'Previously, AI-related demand was focused on U.S. customers, but recently, demand from China is also growing rapidly.'