April 26, 2024

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[THE INVESTOR] Samsung Electro-Mechanics will post record earnings this year on the back of flourishing MLCC industry, said Eugene Investment and Securities on March 20, maintaining a “buy” recommendation and 125,000 won (US$116.68) target price.

Supply will remain tight and price will rise while it improves the product portfolio. The booming market of MLCC, which accounts for over 80 percent of its operating profit, will be positive on its stock price, said analyst No Gyeong-tak.

Its revenue this year will rise 13.5 percent on-year to 7.76 trillion won and operating profit will surge 118.3 percent to 668.5 billion won, estimated the analyst. Margins from MLCC will reach 17.7 percent and will push component solution department’s operating profit up 89.4 percent from last year to 550 billion won, according to No.

Although concerns on parts makers are growing from slowing demand for smartphones, its supply of higher priced products including dual cameras and high capacity MLCCs will maintain its upward momentum, he noted adding that since the stock price has fallen 3.5 percent from the beginning of the year it is time to reevaluate. 

By Hwang You-mee (glamazon@heraldcorp.com)