April 25, 2024

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[THE INVESTOR] Samsung Electro-Mechanics’ earnings are set to improve significantly, said KB Investment and Securities on June 28, maintaining a “buy” recommendation and raising the target price to 200,000 won (US$178.27) from 160,000 won. 

Despite the slow module and printed circuit board sectors, its revenue in the second quarter will increase 8 percent on-year to 1.8 trillion won and operating profit by 147 percent to 174.4 billion won, the highest since the third quarter ofn 2013. In the third quarter, operating profit will surge 123 percent on-year to 229.5 billion won, the highest in 8 years, said analyst Kim Dong-won. 

Boosted by the surge in demand from auto industry, global multi-layered ceramic capacitor market where the company is maintaining the second-largest market share, will swell to 16 trillion won by 2020. Meanwhile camera modules and PCBs will enter the second growth phase next year as Galaxy S10 will be equipped with triple cameras, according to the analyst. 

Samsung Electro-Mechanics’ revenue and operating profit will grow at an average of 14 percent and 78 percent, respectively, for the coming three years, and return on equity will advance to 18.3 percent in 2020 from last year’s 3.8 percent, he said.

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