1. Samsung Electro-Mechanics H1 2025 Earnings: What Happened?
Samsung Electro-Mechanics reported revenue of KRW 2.78 trillion (up 4% YoY) and operating profit of KRW 213 billion (up 5% YoY) for H1 2025. Both figures surpassed market expectations. However, net profit decreased by 21% YoY to KRW 137.2 billion, falling short of market consensus.
2. What Drove the Earnings Fluctuation?
The increase in revenue and operating profit is attributed to the growth of the component segment’s MLCC market and the trend of high-performance smartphones in the optical solution segment. Conversely, the decline in net profit is presumed to be due to non-operating income and losses or tax-related factors. The decline in the operating rate of the package solution division may also have affected profitability.
3. Future Stock Price Outlook and Investment Strategies
Samsung Electro-Mechanics possesses mid-to-long-term growth potential based on its core business competitiveness and growth expectations in AI and automotive electronics. In the short term, a positive stock price trend is expected, driven by the strong performance in Q2. However, improving net profit, securing profitability in the package solution business, and responding to raw material price volatility remain mid-to-long-term challenges. Therefore, investors should make prudent investment decisions considering short-term performance, mid-to-long-term business strategies, and the market environment.
4. Action Plan for Investors
- Short-term stock price movement: Monitor stock price movements after the Q2 earnings announcement.
- Mid-to-long-term growth drivers: Pay attention to news and company strategy announcements related to AI and automotive electronics.
- Risk management: Check for raw material price volatility and improvements in the profitability of the package solutions business.