Samsung Electro-Mechanics shares tumble 15% after record high, but still lead Kospi with 611% gain this year

Samsung Electro-Mechanics shares fell sharply for two consecutive sessions after the company set an all-time high, as investors rushed to lock in profits following a steep short-term rally. Despite the pullback, the stock still leads all Kospi-listed companies in year-to-date returns by a commanding margin.

According to Korea Exchange, Samsung Electro-Mechanics shares closed at a record 2.127 million won ($1,410) on May 29 before tumbling 14.76% over the following two trading sessions.

The stock had surged for seven consecutive sessions beginning May 19, only to reverse sharply as profit-taking pressure mounted.

The closing price stood at 987,000 won on May 19, broke through 1 million won the following day, then cleared 1.5 million won on May 26 and 2 million won on May 29 in quick succession.

Once the stock touched the psychologically significant 2 million won level, investors who had grown uneasy with the pace of the rally began offloading shares in force.

On Monday and Tuesday, foreign investors net sold approximately 170 billion won worth of shares while institutions net sold around 46 billion won. Over the same period, retail investors net bought roughly 220 billion won, providing a floor for the stock.

Even amid the sharp swings, Samsung Electro-Mechanics' year-to-date scorecard remains remarkable. As of Tuesday, the stock had surged 610.98% from its end-2025 closing price, placing it first among all Kospi-listed companies by a wide margin.

Notably, Samsung Electro-Mechanics' preferred shares also claimed third place on the Kospi's year-to-date leaderboard, having surged 443.10% over the same period.

Despite the recent decline, brokerages still see significant upside ahead. DB Securities set the highest target price at 3 million won, while Mirae Asset Securities raised its target to 2.8 million won and both Hyundai Motor Securities and Daol Investment & Securities lifted theirs to 2.3 million won.

The bullish outlook is underpinned by an unprecedented boom in the company's flip-chip ball grid array (FCBGA) substrate and multilayer ceramic capacitor (MLCC) businesses.

"The core investment thesis for Samsung Electro-Mechanics centers on large-scale capacity expansion happening amid a supply shortage, and the committed demand that follows that expansion," said Cho Hyun-ji, an analyst at DB Securities. "Both FCBGA and MLCC are experiencing an unprecedented boom, and valuation multiples for related companies continue to rise. Samsung Electro-Mechanics, which holds top-tier technology in both components, occupies an irreplaceable position in the market."

Park Jun-seo, an analyst at Mirae Asset Securities, said the current AI cycle surpasses both the MLCC shortage of 2017-2018 and the electric vehicle cycle of 2021-2022. "In Samsung Electro-Mechanics' case, medium- to long-term growth is already becoming visible through multi-year exclusive contracts," he said.

Park added that price increases for general-purpose MLCC are already under way through retail distribution channels, and that prices for AI server components are rising even more steeply. "Given the quarterly negotiation structure, further sequential price hikes are expected to follow," he said.

Other top Kospi performers this year include Daewoo Engineering & Construction in second place with a gain of 496.86%, followed by Gwangjeonja in fourth at 393.90%, Gaon Cable in fifth at 368.45%, LG Innotek in sixth at 361.99% and LG Electronics in seventh at 327.09%. Those gains dwarf the returns posted by semiconductor bellwethers Samsung Electronics, up 200.67%, and SK Hynix, up 262.52%, both of which have been riding the industry's supercycle.