Samsung Electro-Mechanics target price jumps W1m despite share slump

"It's already earning well — and it's about to earn even more."

Even as its share price has tumbled, Samsung Electro-Mechanics has seen its target price raised by 1 million won ($747) by one brokerage.

DS Investment & Securities recently raised its target price for Samsung Electro-Mechanics sharply. As of Thursday, the stock had fallen to 1.559 million won — down 36 percent from its intraday peak of 2.417 million won.

In a report titled "Level Up Every Quarter," DS Investment & Securities lifted its target price from 1.6 million won to 2.6 million won, a 1 million won increase. The brokerage said it was "a time to respond with a buy, as upward estimate revisions are expected every quarter."

DS Investment & Securities projected Samsung Electro-Mechanics' third-quarter sales at 3.87 trillion won and operating profit at 651.6 billion won — up 34.1 percent and 150.3 percent, respectively, from the same period last year.

Hana Securities and Kyobo Securities had earlier set their targets even higher, at 3 million won and 2.8 million won, respectively, while Mirae Asset, Kiwoom, Daeshin and Daol Investment & Securities each set theirs at 2.8 million won — all above DS Investment & Securities' figure.

Yuanta Securities Korea named Samsung Electro-Mechanics its top pick in the electronics sector, forecasting a solid three-year growth cycle driven by expanding orders for AI server multilayer ceramic capacitors (MLCCs) and a scale-up in semiconductor package substrates. Despite concerns over a weaker exchange rate, the brokerage said rising selling prices and a higher share of premium products would drive earnings improvement.

Samsung Electro-Mechanics posted the biggest gain on the Kospi this year, surging roughly 700 percent as its share price climbed from the 200,000 won range to above 2.4 million won in an unprecedented bull run. The rally was fueled primarily by surging demand for high-value MLCCs tied to the spread of AI servers. Morgan Stanley also switched its top pick to Samsung Electro-Mechanics, citing strong prospects for MLCC price gains.

The stock's rapid rise drew in a wave of retail investors, earning it the nickname "the people's emperor stock." But the subsequent crash — from above 2.4 million won to the 1.5 million won range — prompted a flood of investor complaints, with many saying "those who didn't buy were the real winners" and "we're ruined."

While brokerages remain broadly bullish on Samsung Electro-Mechanics, the Kospi's top 10 stocks by market cap have continued to struggle. As of Thursday, nine of the top 10 were down from the previous session: Samsung Electronics fell 2.42 percent, SK hynix 2.44 percent, SK Square 8.06 percent, Samsung Electro-Mechanics 3.62 percent, Hyundai Motor 3.42 percent, KB Financial Group 3.38 percent, Samsung Biologics 4.54 percent, Samsung Life Insurance 4.27 percent, and Samsung C&T 5.51 percent. Only LG Energy Solution bucked the trend, rising 2.56 percent. Samsung Electro-Mechanics has shed more than 30 percent since the start of the third quarter.