Samsung SDI, Short-Term Correction from Lowered Earnings Outlook Presents Buying Opportunity

[Asia Economy Reporter Oh Ju-yeon] Hana Financial Investment analyzed that although Samsung SDI's stock price may be adjusted in the short term due to weak first-half performance, considering the still solid growth potential and profitability improvement trend in the EV battery sector, this is a buying opportunity.

According to the Financial Supervisory Service's electronic disclosure system on the 3rd, Samsung SDI's first-quarter sales increased by 4% year-on-year to 2.4 trillion KRW, and operating profit decreased by 55% to 54 billion KRW, exceeding market consensus.

Kim Hyun-soo, a researcher at Hana Financial Investment, diagnosed, "In the case of medium and large batteries, sales increased by 55% year-on-year due to strong electric vehicle sales in Europe, some pre-orders from clients, and increased shipments following the resumption of ESS projects, and profitability is also estimated to have improved." He added, "Small batteries saw sales decrease by 27% year-on-year due to sluggish sales of power tools and smartphones, and profitability also deteriorated significantly. Electronic materials experienced poor performance in the OLED materials sector due to weak smartphone sales, but maintained a stable market share in the high-end polarizing film market, resulting in an 8% year-on-year growth in segment sales and estimated profitability maintaining the previous year's level."

Second-quarter performance is expected to see sales of 2.4 trillion KRW and operating profit of 62.6 billion KRW, down 1% and 60% year-on-year, respectively. Accordingly, this year's sales are projected at 10.7 trillion KRW and operating profit at 602.3 billion KRW, up 6% and 30% year-on-year, respectively, continuing a solid performance growth trend.

Researcher Kim said, "EV battery sales are expected to increase by 38% year-on-year and enter a full-fledged profit structure from the second half, driving performance growth," maintaining a 'Buy' investment opinion and a target price of 390,000 KRW.

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