NH Investment & Securities on the 10th said the operating margin of the component business is expected to improve significantly in the medium term for Samsung Electro-Mechanics. It maintained a Buy rating and raised the target price to 460,000 won from 360,000 won. The previous trading day's closing price of Samsung Electro-Mechanics was 382,000 won.
Hwang Ji-hyun, an analyst at NH Investment & Securities, said, "Demand for multilayer ceramic capacitors (MLCC) is expected to expand structurally due to increased power consumption of artificial intelligence (AI) chips," adding, "We raised our earnings estimates to reflect the potential for MLCC price increases."
Hwang also said, "We applied the average earnings per share (EPS) for 2026–2027 to reflect the portion of profit growth in 2027, when MLCC demand is expected to expand exponentially," adding, "We calculated the valuation by assigning a 10% premium to the top end of the historical band."
As reasons for applying the premium, the report cited structural changes in AI servers and the potential formation of a long-term cycle based on business-to-business (B2B) demand.
Hwang noted, "Recently, the chief executive officer (CEO) of Murata said the company would decide whether to raise prices after confirming actual AI-related demand, which has fueled expectations for MLCC price hikes."
The report added, "Reflecting a rise in MLCC blended average selling price (blended ASP), we forecast operating margins for the component business at 14.8% and 16.7%, respectively."