[THE INVESTOR] Samsung Electro-Mechanics is underappreciated compared to its global peers and there is ample room for its stock price to rise, said KB Investment and Securities on May 15, maintaining a “buy” recommendation and 160,000 won (US$149.37) target price.
Total market value of Taiwan’s Yageo, the fifth-largest MLCC manufacturer, is 22 percent higher than that of Samsung Electro-Mechanics, the second-largest worldwide. For the last 10 years, the Korean company’s total market value has been more than five times larger on average than its Taiwanese rival, said analyst Kim Dong-won.
Samsung Electro-Mechanics’ earnings will continue to head upward at least until the third quarter when the MLCC prices and shipments will sharply rise, and an earnings surprise is expected, forecast the analyst. Operating profit in the period will reach 228.7 billion won, up 122 percent on-year, the highest in 8 years, according to Kim.
Its operating profit will top 1.1 trillion won by 2020, but looking at the drastic increase in demand for MLCC, its annual operating profit is likely to reach 1 trillion won mark earlier than expected, noted the analyst.
By Hwang You-mee (email@example.com)