View of Samsung Electro-Mechanics' Suwon plant. (Photo=Samsung Electro-Mechanics)

 

[Alpha Biz=(Chicago) Reporter Kim Jisun] KB Securities raised the target price of Samsung Electro-Mechanics (009150) to 210,000 won from 190,000 won on the 26th, saying it is expected to benefit from the growth of the artificial intelligence (AI) market.

"The spread of AI smartphones is expected to increase demand for high value-added and high-performance multi-layer ceramic capacitors (MLCCs) and increase capacity per unit," KB Securities said in a report. "As demand for improvement of semiconductor performance through improvement of post-process is getting stronger, the trend of high-rise and large areas based on packaging will continue."

KB Securities said, "In particular, Samsung Electro-Mechanics will be the best IT beneficiary in the future as the supply of ball grid array (FCBGA) to AI accelerators with high entry barriers is expected to start in the second half of the year, and it is expected to enter the glass substrate market after 2027."

KB Securities expects Samsung Electro-Mechanics' operating profit to reach 174.2 billion won in the first quarter of this year, up 24% from the same period last year, exceeding the consensus (average market forecast). This is due to strong sales of the smartphone Galaxy S24 and the release of new Chinese flagship smartphones.

Considering the gradual recovery in MLCC and camera module business conditions, KB Securities expects annual operating profit of 825 billion won and 1.45 trillion won this year and next year, respectively, raising its previous estimates by 4 percent and 8 percent, respectively.

In addition, the average annual growth rate (CAGR) forecast for the next five years has been raised from 14% to 20%, reflecting the mid- to long-term benefits of the opening of the AI market.

[ⓒ AlphaBIZ. 무단전재-재배포 금지]