[Click eStock] Samsung SDI to Shine in Medium and Large Batteries... Operating Profit Expected to Reach 1 Trillion KRW Next Year

"Electric Vehicle and ESS Sector Sales Drive Growth in Europe and the United States"

[Asia Economy Reporter Minwoo Lee] There is a forecast that Samsung SDI's operating profit will exceed 1 trillion won next year. This is expected as profits will be generated in earnest in the mid-to-large battery sector, including electric vehicles, leading to a turnaround to profitability.

On the 1st, Yuanta Securities predicted that Samsung SDI will achieve sales of 13.144 trillion won and an operating profit of 1.061 trillion won next year. This represents an increase of 17.3% and 72.5%, respectively, compared to this year's expected results of 11.209 trillion won in sales and 615 billion won in operating profit. The turnaround to profitability in the mid-to-large battery sector, including batteries for electric vehicles (EV) and energy storage systems (ESS), is cited as the main reason.

It is expected that profits in Samsung SDI's mid-to-large battery sector will begin to appear in earnest from the second half of this year. Researcher Kim Kwangjin of Yuanta Securities stated, "It is estimated that ESS batteries already turned profitable in the second quarter," and added, "For EV batteries, as supply volumes to European customers increase, profitability is expected to turn positive from the fourth quarter of this year."

There is an analysis that electric vehicles will grow rapidly based on the European market, and ESS will grow based on the U.S. market next year. In the European market, due to the combined effects of strengthened environmental regulations and the base effect of the COVID-19 pandemic, sales are expected to grow about 47% from around 450,000 units this year to approximately 660,000 units next year. Researcher Kim explained, "Samsung SDI has large automakers with high market shares in Europe, such as BMW and Volkswagen, as customers," and added, "In particular, the 'Gen5 battery,' which is scheduled to be released next year and uses single-crystal NCA material, is understood to have about 20% improved energy density compared to existing products, contributing to profitability improvement in the EV battery sector."

The new installation volume of ESS in the U.S. market is also expected to increase from about 3 gigawatt-hours (GWh) this year to about 6 GWh next year. Since Samsung SDI maintains a global ESS market share of over 20%, it is analyzed that the company can grow alongside the market. Researcher Kim said, "Accordingly, sales in the mid-to-large battery sector are expected to grow to about 4.7 trillion won this year, 5.9 trillion won next year, and 7.9 trillion won the year after next."

Against this backdrop, Yuanta Securities gave Samsung SDI a 'Buy' investment rating and set a target price of 590,000 won. The closing price on the previous day was 452,500 won.

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