iM Securities evaluated on the 7th that the factors contributing to the rise in Samsung Electro-Mechanics stock included the speculation about subsidies from the Chinese government for smartphones and the world’s largest electronics and IT exhibition 'CES 2025' to be held in Las Vegas, USA, noting that these could remain investment points for Samsung Electro-Mechanics in the future.
Samsung Electro-Mechanics stocks closed at 130,900 won in the KOSPI market the previous day, reflecting a rise of 7.03% (8,600 won) compared to the previous session. Ko Ui-young from the iM Research Institute indicated that the possibility of subsidies from the central Chinese government for smartphones has benefited Samsung Electro-Mechanics. Currently, the central Chinese government only provides subsidies for home appliances, and subsidies for smartphones are being offered only limitedly by some local governments.
Since 38% of Samsung Electro-Mechanics' revenue comes from China, an increase in demand could contribute positively to the company's performance. Ko noted, "If subsidies are provided, demand for smartphones from local companies such as Huawei and Xiaomi is expected to recover," adding, "Samsung Electro-Mechanics is supplying multilayer ceramic capacitors (MLCC) and camera modules to Chinese mobile companies." He further stated, "10-15% of Samsung Electro-Mechanics' MLCC sales and 30% of camera module sales come from the Chinese mobile sector."
Ko also mentioned that the resurgence of interest in artificial intelligence (AI) and robotics due to the CES event is also positive for Samsung Electro-Mechanics. This is because Samsung Electro-Mechanics holds nearly a 40% market share in the MLCC market for AI infrastructure.
Ko stated, "Samsung Electro-Mechanics' flip chip ball grid array (FC-BGA) is also showing a growth of over 20% centered on AMD server central processing units (CPUs) and big tech's self-designed semiconductors," adding, "The proportion of servers in Samsung Electro-Mechanics' FC-BGA sales is expected to increase from 29% last year to 36% this year." He further remarked, "FC-BGA for servers is identified as having significantly higher profitability than other applications."
iM Securities maintains an investment opinion of 'Buy' for Samsung Electro-Mechanics with a target price of 180,000 won.