[Click eStock] Samsung SDI Full-Year Operating Profit Forecasted at 800 Billion KRW... Up 79% YoY

Sales Growth Expected for Batteries and Electronic Materials for Electric Vehicles

[Asia Economy Reporter Minwoo Lee] Samsung SDI is expected to enter a full-scale performance improvement starting from the second quarter of this year. This is because one-time costs related to ESS fire incident response measures will disappear, and sales of medium-to-large batteries for electric vehicles and electronic materials are expected to increase.

On the 3rd, Daishin Securities forecasted that Samsung SDI would record sales of 2.7181 trillion KRW and an operating profit of 7.5 billion KRW in the fourth quarter of last year. Compared to the previous year, sales rose by 9.7%, but operating profit decreased by 97%. This was due to a one-time cost of about 200 billion KRW incurred from the installation of a special extinguishing system related to ESS announced in October last year after the fire incident.

Although there were few positive factors in the IT sector until the first quarter of this year, domestic orders are expected to accelerate from the second quarter. Sales of medium-to-large batteries for electric vehicles (EV) and electronic materials are expected to increase significantly. Accordingly, sales this year are projected to reach 11.732 trillion KRW, and operating profit 806 billion KRW. This forecast represents a 17% increase in sales and a 79% increase in operating profit compared to last year.

Sales of EV medium-to-large batteries this year are predicted to increase by 77.7% to 4.1 trillion KRW compared to last year. This is because supply is expected to expand with the full-scale launch of electric vehicles by European customers. Rather than aggressively expanding production capacity compared to domestic competitors, the focus will be on yield stabilization, leading to a reduction in operating losses this year and entering a phase of turning profitable in 2021. The possibility of re-entering the largest market, China, is also a positive factor. The Chinese market this year is expected to be characterized by qualitative competition rather than market share, meaning the likelihood of Korean medium-to-large battery companies entering the market is increasing.

Profitability in the electronic materials sector is also expected to improve. Major positive factors include ▲ expansion of large OLED production and investment by domestic display companies ▲ recovery in the semiconductor industry and increased shipment volumes. Researcher Kangho Park of Daishin Securities stated, "Although the reduction in domestic LCD panel production is negative, the increase in the proportion of large panels by Chinese companies will offset this through a rise in the average supply price of polarizing films."

Daishin Securities gave Samsung SDI a 'Buy' investment rating with a target price of 290,000 KRW. The closing price on the 2nd was 232,000 KRW.

This content was produced with the assistance of AI translation services.