[Click e-Stock] "Samsung Electro-Mechanics, Earnings Bottom Passed ... Target Price Up"

On the 22nd, IBK Investment & Securities predicted that Samsung Electro-Mechanics' earnings for the first quarter of 2023 would hit the lowest point of the year. Accordingly, they maintained a 'Buy' investment rating but raised the target stock price to 180,000 KRW.

Kim Unho, a researcher at IBK Investment & Securities, stated, "Samsung Electro-Mechanics' operating profit for Q1 2023 is expected to increase by 28.9% from the previous quarter to 130.4 billion KRW," adding, "Operating profits from all business divisions except packaging are expected to rise compared to the previous quarter."

Researcher Kim explained, "Although there is no clear sign yet that IT demand has rebounded, the rebound in the MLCC distribution channel, influenced by inventory adjustments that began in the fourth quarter, is a positive factor."

He also noted that growth in the automotive and network sectors is still being maintained, and he expects server-related sales to come into view in the second half of the year. However, since the packaging division has a high mobile proportion, it is unlikely to see a demand rebound soon.

Researcher Kim estimated that operating profit would show improvement starting from the first quarter as the bottom. He analyzed, "Although the MLCC market is significantly affected by the IT sector's downturn, it is time to pay attention to growth outside the IT sector," and added, "Growth in the packaging division is expected to be led by the server, network, and automotive sectors."