Samsung Electro-mechanics, Forecasts earnings above expectations in 3Q(NH Investment & Securities)

[Infostock Daily= Reporter An Hoe Hyun] NH Investment & Securities predicted on the 4th that Samsung Electro-mechanics' 3Q operating profit would surpass market expectations. It is expected that the company will record more than 10% of its forecasts thanks to normalization of the Multi Layer Ceramic Condenser(MLCC) market.

As a result, the company's investment opinion was 'BUY' and the target stock price was maintained at 185,000 won.

"Samsung Electro-mechanics’ 3Q results are expected to exceed market expectations with all sectors showing good growth," NH Investment & Securities said, adding, "In particular, the increase in volume(sales) and margins are positive due to normalization of the MLCC market." "We are looking forward to benefiting from the impact of sanctions on Huawei in China, which has a small portion of sales in the mid- to long-term," they also explained.

Samsung Electro-mechanics' 3Q operating profit is expected to increase 27% year-on-year to 240.3 billion won.

"Samsung Electro-mechanics is attractive in the mid- to long-term," the NH Investment & Securities said, adding, "The MLCC market is likely to boom in 2021 due to the recovery in demand for IT devices and electronic devices and the expansion of penetration rates of 5G smartphones, and Huawei’s smartphone business, which has a small portion of sales, is in crisis, while existing customers are likely to benefit from reflections, which makes Samsung Electro-mechanics an indirect beneficiary."

Reporter An Hoe Hyun ahh@infostock.co.kr