Daol Investment & Securities on the 28th said Samsung Electro-Mechanics is the world's only company benefiting simultaneously from a boom in multilayer ceramic capacitors (MLCC) and high-value flip-chip ball grid array (FC-BGA) packaging substrates. It kept its investment rating at buy and raised the target price 53.3% to 2.3 million won from 1.5 million won.
Daol Investment & Securities projected Samsung Electro-Mechanics' second-quarter sales this year at 3.3 trillion won, up 19% from a year earlier, and operating profit at 380.7 billion won, up 79%.
Researcher Kim Yeon-mi at Daol Investment & Securities said, "We are pushing for MLCC price increases, and some products are expected to see price hikes applied starting in the third quarter," and added, "Given the recent supply-demand situation, there is a high possibility that price increases will spread to both server and general-purpose products going forward."
Kim particularly projected that if the silicon capacitor market fully opens, additional growth potential will come to the fore. Kim observed that a new growth narrative could form that surpasses the existing MLCC cycle.
Kim said, "Next year's sales will be 15.9 trillion won and operating profit will be 3 trillion won, up 18% and 85%, respectively, compared with this year's annual estimates."