Although Samsung Electro-Mechanics is facing price pressure in the MLCC sector it has a positive outlook in the long term, said NH Investment and Securities on Dec. 6 maintaining a “buy” recommendation and 210,000 won (US$188.14) target price.
Concerns are growing about the deteriorating sector, but increase in number of products used per single device will offset the decline. Demand for low- to mid-priced MLCC is waning from plunging sales of Chinese smartphones and their stocks will need to be cleared by the first quarter of 2019. Higher value added MLCC, however, still has demand from automotive electronics and industrial sectors and supplies are limited, said analyst Lee Gyu-ha.
The advancing specifications of smartphones will be able to offset shrinking demand, and investors should pay attention to its mid- to long-term earnings momentum rather than its fourth-quarter earnings, the analyst underlined.