Daishin Securities on the 7th reiterated its "Buy" recommendation on Samsung Electro-Mechanics and raised its target price by 16.6%, from 2.4m won to 2.8m won.
Analyst Park Kang-ho at Daishin estimates the company's operating profit for the second quarter of 2026 at 423.9bn won — exceeding the firm's previous forecast of 387.0bn won and the market consensus of 385.6bn won by 9.5% and 9.9% respectively.
Quarterly operating profit is projected to climb further, reaching 513.1bn won in the third quarter and 529.0bn won in the fourth — both all-time highs. On an annual basis, operating profit is forecast at 1.747tn won in 2026 (up 91.2% year on year), rising to 2.605tn won in 2027 (up 49.1%) and 3.110tn won in 2028 (up 19.4%).
The principal driver of the upgrades is a deepening supply shortage in two key product lines: FC-BGAs (flip-chip ball grid array substrates, used to package advanced semiconductors) and MLCCs (multilayer ceramic capacitors, essential passive components in electronic devices). Surging investment in AI data-centre infrastructure is pushing demand for server-grade versions of both products well above earlier expectations. Crucially, server-spec MLCCs can be supplied by only two manufacturers globally — Japan's Murata and Samsung Electro-Mechanics — leaving utilisation rates hovering around 95% and enabling the pair to push through price increases.
FC-BGA revenues are expected to reach 2.0tn won in 2026 (up 71.2% year on year) and 2.57tn won in 2027 (up 28.9%). After reaching full capacity utilisation in the fourth quarter of 2026, the product mix is expected to shift towards higher value-added items through 2027, amplifying margin gains.
The company's overall operating margin is forecast to rise steeply, from 8.1% in 2025 to 12.9% in the second quarter of 2026 and 15.1% by the fourth quarter, ultimately reaching 18.3% in 2028.
Samsung Electro-Mechanics shares closed at 1,828,000 won on 6th July. The stock has delivered an absolute return of 1,218.9% over the past 12 months.