[Click eStock] "Samsung SDI, EV Battery Sales to Surge... Target Price Up"

[Asia Economy Reporter Eunmo Koo] DB Financial Investment maintained a ‘Buy’ rating on Samsung SDI, citing significant changes this year including a sharp increase in sales of batteries for electric vehicles (EVs), and raised the target price from 300,000 KRW to 400,000 KRW.

On the 10th, DB Financial Investment projected Samsung SDI’s operating profit for this year to reach 822 billion KRW, an approximately 80% increase compared to last year. Researcher Seongryul Kwon stated in the report, “There are many important changes not only in absolute performance improvement but also in the surge of EV battery sales and escaping annual losses, rapid changes overseas based on energy storage system (ESS) sales, diversification of applications for small batteries, and an increase in the proportion of semiconductor materials and organic light-emitting diode (OLED) materials in electronic materials.”

Researcher Kwon forecasted, “EV batteries will see sales increase by more than 70% this year, breaking even in the second half and moving from a deficit to profitability on an annual basis.” He added, “The overseas sales ratio of ESS will rise from 50% last year to 70% this year, and small batteries will fill the gap caused by a decrease in power tool share with wireless earphones, EVs, and E-Mobility.” Furthermore, “The proportion of low-profit polarizing films in electronic materials will decrease, while sales of semiconductors and OLEDs will increase, raising their related shares.”

Operating profit for the first quarter is expected to be 23 billion KRW, with sales of both batteries and materials declining compared to the previous quarter due to the off-season and inventory adjustments. However, from the second quarter, operating profit is expected to surge to 174.3 billion KRW due to improvements across all sectors, with this trend becoming stronger toward the second half of the year. It is also assessed that, for the first time in the company’s history, medium-to-large batteries could turn profitable in the second half.

The investment rating remains ‘Buy,’ and the target price has been raised from 300,000 KRW to 400,000 KRW. Researcher Kwon explained, “Although the stock price surged 37% in just one month recently, driven by electric vehicle parts, considering the changes and improvement trends in medium-to-large batteries, it is necessary to continue raising the stock price expectations,” adding, “Valuation indicators across the electric vehicle value chain are also rising overall.”

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