 |
Samsung Electro-Mechanics' Suwon Plant Overview. (Photo: Samsung Electro-Mechanics) |
[Alpha Biz= Reporter Kim Sangjin] Meritz Securities Analyzes Samsung Electro-Mechanics' Stock as a Potential Opportunity, Maintaining 'Buy' Rating and Target Price of 165,000 Won
On the 13th, Meritz Securities analyzed Samsung Electro-Mechanics, suggesting that the company’s overall restructuring and the potential for performance growth make the current stock price a possible opportunity. They maintained their target price of 165,000 won and a 'Buy' investment rating. Samsung Electro-Mechanics' stock closed at 120,700 won on the previous trading day.
Meritz Securities expects Samsung Electro-Mechanics' consolidated sales for Q4 this year to increase by 2% year-on-year, reaching 23.53 trillion won, with operating profit expected to grow by 28.7% to 1.42 trillion won. However, this operating profit forecast is 13.7% below the market consensus.
Meritz Securities lowered their sales and operating profit estimates by 1.8% and 7.2%, respectively, due to weak demand in information technology (IT) sectors. They stated that while demand in industrial and automotive electronics remains strong, uncertainty about the recovery of the IT market persists. The company also expects a decrease in operating rates, as there has been a more intense inventory adjustment than usual.
Looking ahead, Meritz Securities sees significant potential for performance growth starting next year. Due to recent concerns about the upstream industries, Samsung Electro-Mechanics’ stock has fallen over 30% from its yearly high. Analyst Yang added, “In the MLCC sector, while shipment growth has slowed, the average selling price (ASP) has risen by 5.8% compared to the previous year, showing that Samsung Electro-Mechanics' industrial structure is qualitatively improving.”
Meritz Securities predicts that the share of servers and automotive electronics in Samsung Electro-Mechanics' total sales will increase from 22.2% next year to 33.4% by 2026. They concluded, “While short-term performance is disappointing, the high-intensity inventory adjustments in Q4 can be seen as a positive factor for next year.”
Alphabiz Reporter Kim SangJin(letyou@alphabiz.co.kr)
