买入：人工智能、电动汽车和先进驾驶辅助系统将抵消智能手机业务困境

Disclosures & DisclaimerThis report must be read with the disclosures and theanalyst certifications inthe Disclosure appendix, and with the Disclaimer, which forms part of it.Upside catalysts look overshadowed by potential tariff hit tosmartphonesand lingering demand woes……but key indicators are turning positive;MLCC supplyistightening ongrowing contributionof AI, EV, and ADASMaintain Buywith unchanged TP ofKRW180,000Tide turning but overlooked:We see key indicators are coming in positive for SEMCO,butunderlyingupside catalysts are not priced in at all with investors’sentiment still lookingoverwhelmed by macro uncertainties.Dramatic change in key growth drivers:As a beta play of SamsungElectronics(005930KS, KRW54,200, Buy) anda proxy of (China) smartphone plays,SEMCO’s stock prices have been under pressure on negative headlines onSamsung’sbusinessandsmartphonedemand. However, we note that since2017, sales contribution of the captive customer has dropped sharply from 48% to29%as of 2024, while that ofsmartphoneparts fell from 77% to 50%,replacedbyfast growing applications such as AI serversandautos.We thinktheimpactofsupply-side reactions to changing industry dynamics, such as disciplined newinvestment andcapacity re-allocationto high-end products,is stillunderestimated.Upbeatindicators:To us, key takeaways from recent earnings calls at majormulti-layer ceramic capacitor (MLCC) players wastighteningsupplywhichdoesnot lookwell recognised in the market.We believe utilisationrates at most ofMLCC makers including SEMCO andJapanesefirmshave exceeded80%,withcapacityadditionplanfor 2025atless than 10%,as theyaggressivelyshiftexistingcapacitiesto high-end applications such as AI servers andautos. Book-to-bill ratiosatmajorJapaneseplayersalso rose to above1asof1Q25,suggesting strong new orders despite muted near-term demand.SEMCO’sblended ASP discount toJapanesepeershas widenedto a nine-year high,which may implyeither upside to SEMCO’s product mix or low-end MLCC prices.Boost fromChinese EVs with ADAS:We believeSEMCO, as one ofthemajorMLCC suppliersfor BYD,shouldbenefit from growing EV sales with rising adoptionof ADAS features. We estimate BYD’s EV models with level 2-3 self-driving featuresto use 2.3x more MLCCs (3xmoreMLCCsfor ADAS) than internal combustionengines.Also,SEMCO seems tohavetakenhigher market share within ChineseOEMs than itsglobal market share for auto MLCCs, in our view(Ex 10).Ontheback of strong growth ofEV salesvolumeand MLCC content percar, we forecastSEMCO’s auto MLCC sales to grow ata 2024-27eCAGR of 25% with averageannual OP growth of 57%.Maintain BuywithunchangedTP of KRW180,000:Webelieve the current troughvaluation has priced ina slower demand pick-upbut not there-rating potential from AI.We maintain our estimates and our 2025e/26e/27e OP estimates are6%/19%/27%aboveconsensussupported byour constructiveview on MLCC margin expansion andbenefits from AI.See Page10for valuation and risks.Samsung Electro Mechanics(009150 KS)Buy:AI,EV, andADAS tooffset smartphone woes ◆◆◆◆◆◆ Find out more 2Financial statementsYear to12/2024a12/2025e12/2026e12/2027eProfit & loss summary(KRWb)Revenue10,29410,84611,52212,028EBITDA1,5751,9482,2002,451Depreciation & amortisation-840-1,005-923-886Operating profit/EBIT7359431,2761,565Net interest-191929PBT7979521,2961,595HSBC PBT7979521,2961,595Taxation-132-209-285-351Net profit6797179761,201HSBC net profit6797179761,201Cash flow summary(KRWb)Cash flow from operations1,5011,6741,8302,068Capex-776-1,000-1,000-1,000Cash flow from investment-806-1,233-1,320-1,447Dividends-89-151-166-181Change in net debt-305-281-325-410FCF equity6846287841,021Balance sheet summary(KRWb)Intangible fixed assets146146146146Tangible fixed assets6,3376,1546,2776,437Current assets5,8916,6327,4628,315Cash & others2,0132,5463,1223,783Total assets12,77413,51714,74416,156Operating liabilities2,1392,0212,1512,250Gross debt1,6361,8882,1392,391Net debt-377-658-982-1,392Shareholders' funds8,7899,38010,22511,287Invested capital8,2228,3658,6128,864Ratio, growth and per share analysisYear to12/2024a12/2025e12/2026e12/2027ey-o-y % changeRevenue15.85.46.24.4EBITDA5.223.612.911.4Operating profit11.328.235.422.6PBT41.619.436.123.1HSBC EPS60.65.636.123.1Ratios (%)Revenue/IC (x)1.31.31.41.4ROIC8.29.312.214.4ROE8.27.910.011.2ROA6.36.07.48.3EBITDA margin15.318.019.120.4Operating profit margin7.18.711.113.0EBITDA/net interest (x)2302.1Net debt/equity-4.2-6.8-9.4-12.1Net debt/EBITDA (x)-0.2-0.3-0.4-0.6CF fromoperations/net debtPer share data(KRW)EPS Rep (diluted)8989.479491.4312919.6515901.18HSBC EPS (diluted)8989.479491.4312919.6515901.18DPS1800.002000.002200.002400.00Book value116339.91124166.07135342.03149405.26Valuation dataYear toEV/salesEV/EBITDAEV/ICPE*PBFCF yield (%)Dividend yield (%)* Based on HSBC EPS (diluted)ESGmetricsEnvironmental IndicatorsGHG emission intensityEnergy intensityCO2reduction policySocial IndicatorsEmployee costs as % of revenuesEmployee turnover (%)Diversity policySource: Company data