Yuanta Securities on the 8th reiterated its "Buy" recommendation on Samsung Electro-Mechanics (KRX: 009150), raising its target price from 2.2m won to 2.8m won. Based on the stock's most recent closing price of 1,648,000 won (as of the 7th), the implied upside is 70%.
The brokerage forecasts second-quarter revenue of 3.24tn won, up 16.4% year on year, with operating profit of 417.9bn won, implying an operating margin of 12.9%. Both figures are expected to beat market consensus, with operating profit coming in 6.9% above the analyst median.
The key drivers of the earnings improvement are a richer product mix in the components division — reflecting a higher proportion of MLCCs (multilayer ceramic capacitors) destined for server applications — and rising selling prices for FC-BGA (flip-chip ball grid array) substrates in the packaging division.
Yuanta has revised its operating profit estimates upward by 3% for 2026 and 19% for 2027. The upgrades are underpinned by expectations of MLCC price increases, a disclosed order worth approximately 450bn won for silicon capacitors and AI-server MLCCs, and two large-scale capital expenditure programmes: an 8tn won facility in Sejong and a 15tn won facility in Busan.
The new target price is derived by applying a target price-to-earnings multiple of 72.8 times to the estimated 2027 earnings per share of 38,532 won. The target multiple incorporates a 15% premium over the projected 2027 PER of Ibiden, the Japanese substrate maker used as the primary global peer.
"The simultaneous upcycle in both MLCCs and FC-BGA creates a compounding and more durable earnings growth trajectory compared with single-business global peers," Yuanta said.
The brokerage's annual forecasts call for revenue of 13.36tn won and operating profit of 1.613tn won in 2026, rising to revenue of 18.19tn won and operating profit of 3.573tn won in 2027.