The creator of the article is an analyst of KB Securities. He will be reached at cm.lee@kbfg.com. — Ed.
Elevate goal value by 17% to KRW350,000
We preserve BUY and lift our TP by 17% to KRW350,000 on SEMCO. Our DCF-based TP, which means 8.22% WACC (9.47% COE; 2.15% after-tax COD; 1.10 60m adj. beta), displays surging demand for high-value AI elements, rising cargo quantity and enhancing product combine. We elevate our 5y avg. OP development forecast (14%→22%). Our TP implies 28.0x 12m fwd P/E, 2.67x P/B and provides upside of 34.1% (vs. Dec 3 shut).
4Q25 preview: Peak-season-level earnings regardless of seasonality
We forecast 4Q25 income at KRW2.87tn (+15% YoY) and OP at KRW228.4bn (+99% YoY; 8.0% OPM), suggesting peak-season–degree earnings regardless of seasonality:
1) KRW/USD stays elevated (at 1,467 as of Dec 3).
2) Income combine is shifting away from IT elements and towards higher-value merchandise, resembling AI server elements and automotive components, serving to dilute typical seasonality.
Consequently, profitability for MLCCs, bundle substrates and different AI-driven companies ought to exceed 1H25 ranges.
2026E-27E: Advantages from super-cycle
SEMCO stays our high IT Parts decide. Each MLCCs and bundle substrates ought to profit from AI-driven demand and a super-cycle in 2026–27. MLCCs: Results of improved product combine are rapidly materializing, and costs for some objects could improve as early as 1H26, producing significant working leverage. Package deal substrates: Capability utilization (at the moment ~60%) ought to enhance to ~80%/~90% in 2026/2027. Excessive-value substrates for community/server purposes ought to fill the hole left by weak front-end demand and decrease PC FC-BGA profitability (2H26E: 4 new clients for AI accelerator/network-switch substrates). This could drive a pointy earnings uptrend.
