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View of Samsung Electro-Mechanics' Suwon plant. (Photo=Samsung Electro-Mechanics) |
[Alpha Biz= Reporter Kim Minyoung] KB Securities has maintained its 'Buy' rating and target price of 210,000 KRW for Samsung Electro-Mechanics, citing expectations of upward performance and benefits from the expansion of artificial intelligence (AI).
In a report released on the 16th, KB Securities stated, "Samsung Electro-Mechanics' second-quarter performance is expected to meet consensus." They maintained their top pick perspective for the IT components sector.
For the second quarter of 2024, KB Securities estimates that Samsung Electro-Mechanics will achieve sales of 2.39 trillion KRW, an 8% increase year-on-year, and an operating profit of 205.7 billion KRW, a 0.4% increase. These figures are in line with consensus expectations.
The report predicts that MLCC (multilayer ceramic capacitors) shipments will increase, particularly in the automotive and industrial sectors (such as AI servers and power systems), while maintaining low inventory levels. Shipments for PCs and Chinese smartphones, which have been low, are also expected to see a slight increase. Improved product mix and a high USD-KRW exchange rate are expected to enhance profitability.
Despite entering a seasonal low for camera modules, sales are expected to improve year-on-year. Although there is no significant demand recovery for substrates yet, KB Securities estimates a slight improvement in BGA (ball grid array) sales due to increased demand from Chinese markets and mid-range Samsung smartphones. FC-BGA (flip-chip ball grid array) demand recovery is also anticipated for automotive, server, and PC applications.
Alphabiz Kim Minyoung (kimmy@alphabiz.co.kr)
