Report

Samsung Electro-Mechanics (009150.KS): Bright road ahead for MLCC

We raise our six-month-forward target price from KRW133,000 (2.2x 2018F BPS) to KRW143,000 (2.4x 2018F BPS in reflection of improving ROE) and maintain our rating at BUY. 1Q18 consolidated sales are expected to come in 2.5% below our estimate at KRW1.9tn because of sluggish ACI sales caused by the US strategic client’s inventory cuts. However, consolidated operating profit is forecast to beat our forecast by 4% to come to KRW141bn on MLCC price hikes.

Underlying
Samsung Electro-Mechanics Co. Ltd

Samsung Electro-Mechanics manufactures, markets and distributes devices, parts and components. These are parts and components for mobile communications, computer components and peripherals, materials, general and industrial use, optical/thin film and audio and video. Co.'s products consists of flyback transformers, radio frequency modulators, low noise block-down converters, VCR drums, VCR heads, VCR drum motors, electronic tuners, multi-layer ceramic capacitors, deflection yokes, RF-units, high voltage capacitors, speakers, decks, keyboards, switching mode power supplies, floppy disc drives, CD-decks, and broadcasting satellite receivers.

Provider
Hyundai Motor Investment & Securities
Hyundai Motor Investment & Securities

Hyundai Motor Investment & Securities is the investment banking arm of the Hyundai Motor Group. The company offers stock brokerage and advisory services; derivative products brokerage and advisory services; wrap account portfolio management services; and VIP wealth management and tax planning, institutional equities, derivatives, and futures brokerage services, as well as sells investment and institutional products. It also provides equity offering, ABS, real estate PF and real estate PF securitization, offshore SOC, structured financing, asset securitization, real estate sales, IPO advisory, and private equity fund and fund management services; and CMA/RP portfolio management and fixed income based investments, as well as involved in the issuance, management, and brokerage of OTC derivatives. In addition, the company offers research services, including macro economic forecasts and stock market outlook, industry overviews and forecasts, fixed income strategies, corporate credit analysis, and valuation analysis. Further, it offers a range of retirement and pension services for individuals and corporate members; portfolios and asset allocation consulting and marketing services; proposing retirement pension plans; contract and payment management services; pension plan advisory and actuarial services; and system development and implementation services, as well as operates call centers for retirement pension services, etc. 

Analysts
Greg Roh

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