A009150 Glass Core Joint Venture Will Drive Future Margin Expansion

Analysts have modestly raised their price target on Samsung Electro-Mechanics to approximately ₩300,900 from about ₩291,600, citing slightly stronger expectations for long term revenue growth, profit margins, and future valuation multiples.

What's in the News

• Signed an MOU with Sumitomo Chemical Group to form a joint venture focused on manufacturing Glass Core, a critical material for next generation semiconductor package substrates targeting AI and high performance computing applications (Key Developments).
• The joint venture will combine the technological capabilities and global networks of Samsung Electro-Mechanics, Sumitomo Chemical, and Dongwoo Fine-Chem to build Glass Core manufacturing and supply capacity and accelerate market expansion (Key Developments).
• Samsung Electro-Mechanics will be the primary investor with a majority stake, while Sumitomo Chemical Group participates as a minority shareholder. Final details on structure, schedule, and corporate name are expected to be agreed by next year (Key Developments).
• The joint venture headquarters and initial Glass Core production base will be located at Dongwoo Fine-Chem's Pyeongtaek site, positioning the company close to key semiconductor manufacturing ecosystems (Key Developments).

Valuation Changes

• The fair value estimate has risen slightly to around ₩300,900 from about ₩291,600, reflecting a modestly higher intrinsic valuation.
• The discount rate has edged down marginally to roughly 8.74 percent from about 8.76 percent, implying a slightly lower required return.
• The revenue growth forecast has increased slightly to approximately 7.95 percent from about 7.86 percent, signaling a modestly stronger top line outlook.
• The net profit margin assumption has inched up to around 9.48 percent from roughly 9.45 percent, indicating a small improvement in expected profitability.
• The future P/E multiple has moved up modestly to about 22.3x from roughly 21.8x, suggesting a slightly richer valuation multiple applied to future earnings.