KOSPIElectronic Components001820

Samwha Capacitor

₩157,700▼ 0.63%2026-10-02 close

Market Cap

₩1.6T

Turnover

₩92.5B

Volume

590,000 shares

Shares out.

10.4M

PER

59.4×

PBR

4.0×

EPS

₩1,847

Dividend Yield

0.46%

PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Dividend yield is based on ₩500 per share · Prices as of the 2026-10-02 close

Report overview

MLCC Price Hikes Trickle Down: A Margin Recovery Test

After four years of eroding margins, Samhwa Capacitor returned to a double-digit operating margin in Q2 2026, and the question now is whether the trickle-down from major suppliers' price hikes and the Yongin capacity expansion show up in the numbers from the second half onward.

1
Q2 2026 revenue of KRW 82.8bn and operating profit of KRW 8.6bn produced a 10.4% operating margin, a sharp recovery within two quarters from the operating loss of KRW 0.17bn in Q4 2025.
2
On an annual basis, revenue rose from KRW 263.5bn in 2022 to KRW 294.5bn in 2025, yet operating profit fell from KRW 30.5bn to KRW 12.9bn, showing flat top-line and margin erosion at once.
3
As major MLCC suppliers shift lines toward high-value products, a supply gap has opened in commodity MLCC, and Samhwa Capacitor is cited as a candidate beneficiary of that gap.
4
On the automotive side, its selection as a DC-Link capacitor supplier for Hyundai Motor Group's next-generation EV platform is cited as the basis for volume expansion.
5
A conservative balance sheet with a 21.7% debt-to-equity ratio provides support, but multiples built on a low earnings base and the risk of slowing traditional IT and auto demand are burdens.

Business structure

Samhwa Capacitor Industrial, founded in 1956 and listed on KOSPI in 1976, is a specialist capacitor maker generally described as Korea's only comprehensive capacitor producer, covering effectively the full lineup except electrolytic capacitors, which are handled by an affiliate.

Its main product families are multilayer ceramic capacitors (MLCC), single-layer and disc-type ceramic capacitors (DCC), film capacitors, and DC-Link capacitors used in EV inverters.

MLCC is a passive component used across smartphones, servers, appliances and automotive electronics, while DC-Link is a higher-value part that absorbs voltage fluctuation inside the inverter converting battery DC into AC for the motor.

MLCC is the largest slice of the mix: Samsung Securities analyst Lim Eun-young stated in an April-May 2026 report that Q1 2026 MLCC revenue of KRW 38.7bn accounted for 52% of total revenue of KRW 72.8bn.

For Q2 2026, iM Securities said in its August 24, 2026 report that MLCC and DC-Link revenue were KRW 43.5bn (up 20.5% year on year) and KRW 16.9bn (up 14.2%) respectively.

The customer base spans domestic and overseas IT majors, appliance and industrial set makers, and automotive clients; on the automotive side, the same iM Securities report noted that the company was selected in 2024 as a DC-Link capacitor supplier for the drive inverter of Hyundai Motor Group's next-generation dedicated EV platform, eM.

The competitive structure is clearly tiered, with Murata, Samsung Electro-Mechanics and Taiyo Yuden at the global top, while Samhwa Capacitor is far smaller in scale but holds ground through its full domestic lineup and automotive/industrial niches.

In a corporate value-up disclosure dated March 27, 2026, the company set out goals of strengthening a profitability-centered management system against downstream volatility and securing a stable earnings base through capacity expansion and cost competitiveness.

Earnings trend

Quarterly revenue · Operating profit

₩78.8B₩5.6B25Q2₩72.5B₩2.7B25Q3₩70.8B-₩200M25Q4₩72.9B₩4.7B26Q1₩82.8B₩8.6B26Q2

RevenueOperating profit

Annual revenue · Operating profit

₩263.5B₩30.5B2022₩280.8B₩23.7B2023₩295.4B₩17.8B2024₩294.5B₩12.9B2025

RevenueOperating profit

Quarterly results · Last 5 quarters
Quarter	Revenue	Operating profit	Op. margin
2025Q2	₩78.8B	₩5.6B	7.1%
2025Q3	₩72.5B	₩2.7B	3.7%
2025Q4	₩70.8B	-₩200M	−0.2%
2026Q1	₩72.9B	₩4.7B	6.4%
2026Q2	₩82.8B	₩8.6B	10.4%

Annual results
Year	Revenue	Operating profit	Net income (parent)	Op. margin	ROE	Debt-to-equity
2022	₩263.5B	₩30.5B	₩29.1B	11.6%	13.0%	27.5%
2023	₩280.8B	₩23.7B	₩20.8B	8.4%	8.5%	25.6%
2024	₩295.4B	₩17.8B	₩21.8B	6.0%	8.2%	22.8%
2025	₩294.5B	₩12.9B	₩12.5B	4.4%	4.5%	21.7%

Consolidated basis (financial statements including subsidiaries) · Final figures from DART filings · Net income attributable to owners of the parent · Data as of 2026-09-04

Earnings analysis

Looking at annual trends first, the top line grew modestly while profitability stepped down.

Revenue was KRW 263.4bn in 2022, KRW 280.7bn in 2023, KRW 295.4bn in 2024 and KRW 294.4bn in 2025 - essentially flat over the last two years - while operating profit fell for four straight years from KRW 30.5bn to KRW 23.6bn, KRW 17.8bn and KRW 12.8bn.

The operating margin slid from 11.6% to 8.4%, 6.0% and 4.4%, and net profit attributable to owners fell from KRW 29.1bn in 2022 to KRW 12.5bn in 2025.

Operating cash flow narrowed from KRW 48.4bn in 2022 to KRW 25.9bn in 2025, yet remained above operating profit each year, preserving the cash-generating profile typical of a depreciation-heavy manufacturer.

The quarterly path is where the turn shows: after Q3 2025 revenue of KRW 72.5bn with operating profit of KRW 2.6bn and Q4 2025 revenue of KRW 70.7bn with an operating loss of KRW 0.17bn, Q1 2026 swung back to profit with revenue of KRW 72.8bn and operating profit of KRW 4.6bn, a 6.4% margin.

In Q2 2026, revenue reached KRW 82.8bn and operating profit KRW 8.6bn for a 10.4% margin, with net profit attributable to owners of KRW 8.2bn - about two-thirds of full-year 2025 net profit earned in a single quarter.

Summing the most recent four quarters (Q3 2025 through Q2 2026) gives roughly KRW 299.0bn of revenue and about KRW 15.8bn of operating profit, indicating that earnings recovery relative to full-year 2025 is under way.

The balance sheet at end-2025 showed liabilities of KRW 60.6bn against equity of KRW 279.6bn, a debt-to-equity ratio of 21.7%, down each year from 27.5% in 2022.

That said, the margin improvement is still only a two-quarter record, and how much came from product mix versus pricing needs to be re-verified against segment figures in the quarterly filings.

Industry analysis

The MLCC industry entered a tightening phase in 2026, driven by AI server demand.

According to THE ELEC, Samsung Electro-Mechanics' book-to-bill ratio stood at 1.31 as of end-June, the highest since the pandemic, with Murata at 1.30 and Taiyo Yuden at 1.25, while TrendForce said average selling prices had risen 20-25% as distributors and agents pre-emptively secured inventory.

Price increases have turned into actual policy: Money Today reported on August 30, 2026, citing TrendForce, that Samsung Electro-Mechanics raised distributor prices by 30% from August and is expected in Q4 to widen the increase to OEM and ODM customers, including high-spec AI server product lines.

Within this structure, the opening for mid-tier makers comes from the majors' line conversions. iM Securities analyst Lee Sang-hyun explained in an August 2026 report that as large suppliers cut low-margin commodity MLCC output in favor of higher-margin products, distributor inventories of commodity MLCC have fallen sharply, creating a supply gap.

Demand is not uniformly strong, however: the same Money Today report noted that traditional ICT and automotive markets may see weaker-than-usual second-half peak demand amid slowdowns in China and the United States, and that the price rise reflects AI-centered high-spec demand and supplier production adjustments rather than a broad recovery in end demand.

In cycle terms, the market is moving from the start of price increases toward broader diffusion, with Japanese suppliers' participation cited as the swing variable.

Samhwa Capacitor's position is not head-to-head competition with the global top three, but rather whether it can secure both volume and pricing in the commodity and mid-spec space they are vacating, plus automotive niches.

Outlook

No numerical guidance from the company has been confirmed; what is verifiable in official documents is the direction set out in the March 27, 2026 value-up disclosure, namely securing a stable earnings base through capacity expansion and cost competitiveness, strengthening profitability-focused production and sales strategy, and pursuing customized sales and new markets via overseas production and sales networks.

On capacity, Samsung Securities analyst Lim Eun-young argued in May 2026 that once the ongoing Yongin plant expansion is reflected, output could rise 40-50%, leaving the actual ramp and revenue recognition timing as a checkpoint from the second half onward.

On pricing, the key is whether the majors' increases trickle down: iM Securities said in its August 2026 report that Samsung Electro-Mechanics' price increases, limited to high-capacitance parts through June, broadened to all specifications from July and continued in August, while Yageo also shifted to across-the-board increases in July and August.

For the automotive segment, the same report projected that volume expansion at customers including Hyundai Motor Group will begin in earnest going forward, though this is an analyst projection rather than a confirmed order disclosure by the company.

On the other side is the demand-allocation issue flagged by TrendForce: with demand skewed 55:45 between the first and second halves, the risk of a weaker second-half peak season and order adjustments in 2026 is rising.

In sum, the second half of 2026 is a window in which three threads - price pass-through, the Yongin ramp, and automotive volume - are tested at once, and how much each lands in the income statement must be verified in the Q3 and Q4 results.

With margins already up for two consecutive quarters, market attention has shifted from whether improvement exists to how durable and how large it is.

Valuation

PER

59.4×

PBR

4.0×

ROE

6.9%

EPS

₩1,847

BPS

₩27,556

Dividend per share

₩500

The first thing to weigh when reading the valuation is the low earnings base: 2025 operating profit fell to less than half of the 2022 level before recovery began, so the price-to-earnings multiple calculated on the most recent four quarters of profit sits well above the band in which this company has historically traded.

It also trades at a premium to net assets, consistent with the view that the market is pulling forward much of the earnings recovery expected from the second half of 2026.

On dividends, the March 27, 2026 value-up disclosure showed a 2025 payout ratio of 41.4% and a 2025 dividend amount of KRW 5,197,437,500, up 1.3% from 2024, with the company stating it qualifies as a high-dividend company under Korean tax law; still, after a large share-price move, the dividend yield itself remains low for anyone approaching this as an income holding.

As for broker views, iM Securities said in its August 24, 2026 report that it raised its target price to KRW 127,000 from KRW 51,000 and maintained a 'buy' rating - that is the broker's view, not KOSAI's.

Ultimately, whether the current multiple is supported hinges on whether Q3 and Q4 2026 sustain the Q2 margin level, and until that is confirmed the gap between the earnings base and the multiple remains a source of volatility for this stock.

PER, EPS, PBR and BPS are all calculated in-house (the same method as Naver and Toss) · Dividend yield = cash dividend per share from DART filings (supplemented by KRX) ÷ current price · As of 2026-09-04

Bull factors

Beneficiary of the commodity MLCC supply gap

As global top-tier makers shift lines toward high-margin AI server and automotive products, a gap is opening in commodity specifications. iM Securities analyst Lee Sang-hyun noted in an August 2026 report that distributor inventories of commodity MLCC have fallen sharply, creating a supply gap.

Samhwa Capacitor has product lines in this space, so there is discussion of room to improve both volume and pricing. Notably, the rise in the Q2 2026 operating margin to 10.4% coincides in timing with this shift in the environment.

Margin recovery confirmed for two straight quarters

After an operating loss of KRW 0.17bn in Q4 2025, operating profit of KRW 4.6bn in Q1 2026 and KRW 8.6bn in Q2 2026 traced a recovery path in the numbers. Q2 2026 revenue of KRW 82.8bn is the largest in the disclosed quarterly window, and the 10.4% operating margin approaches the 11.6% full-year level of 2022.

Net profit attributable to owners of KRW 8.2bn in Q2 2026 covered a large share of the KRW 12.5bn recorded for all of 2025 in a single quarter. If the improvement stems from mix and pricing rather than one-off items, its continuation into the next quarter becomes a live question.

Automotive DC-Link plus low financial leverage

DC-Link capacitors for EV inverters are high-value parts requiring heat resistance and reliability, and iM Securities cited the company's 2024 selection as a supplier for Hyundai Motor Group's next-generation dedicated EV platform, eM. Per the same report, Q2 2026 DC-Link revenue was KRW 16.9bn, up 14.2% year on year.

Financially, end-2025 liabilities of KRW 60.6bn against equity of KRW 279.6bn put the debt-to-equity ratio at just 21.7%, limiting balance-sheet strain even during expansion. Having declined each year from 27.5% in 2022, the capacity to fund investment is in place.

Bear factors

A four-year structural margin decline

The operating margin fell for four consecutive years, from 11.6% in 2022 to 8.4% in 2023, 6.0% in 2024 and 4.4% in 2025. Over the same period revenue rose from KRW 263.4bn to KRW 294.4bn, meaning top-line growth persistently failed to convert into profit.

Operating cash flow also nearly halved, from KRW 48.4bn in 2022 to KRW 25.9bn in 2025. Whether the first-half 2026 recovery reverses that four-year trend or is a cyclical rebound cannot be judged from just two quarters of data.

Divergent demand outside AI

The fact that price momentum is concentrated in high-spec AI demand cuts both ways for a maker with a large commodity mix.

Money Today reported on August 30, 2026, that traditional ICT and automotive markets may see weaker-than-usual second-half peak demand amid slowdowns in China and the United States, and the price rise reflects AI-centered high-spec demand and supplier production adjustments rather than a broad end-demand recovery.

A meaningful share of Samhwa Capacitor's revenue base sits in appliances, industrial and automotive, so its benefit path differs from firms with heavy direct AI server exposure. Samsung Securities also noted in a May 2026 report that data center shipments account for less than 5% of revenue.

Volatility from expectations priced in early

While the earnings recovery spans two quarters, the share multiple sits well above this company's historical trading range.

That is consistent with the market pricing in second-half price pass-through and the Yongin expansion in advance, a structure in which a shortfall versus expectations can trigger a sizable retracement.

The intensity of the reaction to news flow - including a limit-up session in May 2026 - illustrates the nature of that volatility. Quarterly results and segment revenue disclosures are likely to be the moments when those expectations are tested.

Risk factors

End-demand and cycle risk

MLCC is a classic cyclical passive component, and an adjustment in the AI investment cycle could shake demand and pricing at once. TrendForce noted that post-pull-in inventory correction, geopolitical uncertainty and monetary policy shifts remain downside risks to consumer product demand and prices.

Samhwa Capacitor actually posted a quarterly operating loss in Q4 2025, confirming how sharply profit can swing when demand rolls over. Its structurally weaker pricing power versus the top tier can also work against it in a downturn.

Raw material and cost risk

MLCC costs are sensitive to ceramic powder and metal electrode material prices.

In requesting price adjustments, Taiyo Yuden stated that surging raw and auxiliary material prices had reached a level where internal cost cuts alone could not absorb the increase, and a Hana Securities report also cited rising gold and silver prices as background to price hikes.

Top-tier suppliers have the bargaining power to pass costs through, but whether a mid-tier maker can do so at the same pace is a separate matter. If price increases lag cost inflation, the improved margin could compress again.

Expansion execution and utilization risk

The Yongin plant expansion is central to capacity expectations, but new lines typically require time for yield stabilization and customer qualification.

On the expansion, Samsung Securities argued in a May 2026 report that once the ongoing Yongin expansion is reflected, output could rise 40-50%, but that is an estimate of potential capability, not booked revenue. If demand proves weaker than expected, added depreciation returns as a fixed-cost burden.

Post-expansion utilization metrics and segment revenue will be the yardsticks for judging the actual pace of payback.

What to watch next

Late October to mid-November 2026
Q3 2026 results. Whether the 10.4% operating margin from Q2 holds and whether revenue builds above the KRW 82.8bn level will be the first test of the durability of the margin recovery.
Quarterly report filing in November 2026
Product-level revenue breakdown in the DART quarterly report. Changes in MLCC, DC-Link and film revenue and mix will show whether improvement came from pricing or from product mix.
Q4 2026
Whether Samsung Electro-Mechanics executes price increases for OEM and ODM customers. If the 25-30% commodity and 10-20% AI server increases projected by TrendForce are implemented, the scope of trickle-down to smaller suppliers becomes measurable.
January-February 2027
Preliminary full-year 2026 results and the dividend resolution. Whether the 41.4% payout ratio of 2025 is maintained, and how recovered earnings are split between dividends and investment, will indicate capital allocation direction.
Around March 2027
The 2026 annual report and a review of value-up plan execution. Watch whether the stated capacity expansion and cost competitiveness goals are borne out in actual capex and segment profitability.

Overall view

Samhwa Capacitor saw its margin step down over four years while revenue hovered near the KRW 300bn threshold, and it has now lifted margins for two consecutive quarters in 2026.

Q2 2026 revenue of KRW 82.8bn and operating profit of KRW 8.6bn, a 10.4% margin, is the strongest print in the disclosed quarterly window, a large swing from the operating loss in Q4 2025.

Behind it lies MLCC supply tightening triggered by AI server demand and a commodity supply gap created by the majors' line conversions, with the Yongin expansion and DC-Link volumes for Hyundai Motor Group's EV platform layered on as potential variables.

On the other side sit the divergence between AI and traditional ICT/automotive demand, rising raw material prices, and yield and utilization risk on new lines.

The balance sheet is conservative with a 21.7% debt-to-equity ratio, limiting strain during expansion, but the gap between a multiple built on a low earnings base and actual results remains a source of volatility.

What needs checking is simple: whether the Q2 margin holds in Q3 and Q4, and whether the improvement can be explained by pricing or mix in the product-level revenue disclosures. This report is for information purposes only and contains no buy or sell recommendation or target price.

Sources

Korea Exchange (KRX) — Prices · Market Cap · Volume
FSS electronic disclosure system (DART) — Financial statements · Dividend filings

Show 18 more articles and sources

Report written 2026-09-05 · Data as of 2026-09-04

This content is AI analysis of market data and web search results, provided for information only. It is not a solicitation or recommendation to invest. Investment decisions and their consequences are the investor's own responsibility. Data may be delayed or contain errors.