[Click eStock] "Samsung SDI Expected to Return to Profit in Automotive Batteries... Stock Price Forecasted to Rise"

Kiwoom Securities Report
Q4 Operating Profit 340.3 Billion KRW...1591% Increase YoY

[Asia Economy Reporter Minji Lee] Kiwoom Securities maintained a buy rating and a target price of 500,000 KRW for Samsung SDI on the 28th, expecting the automotive battery segment to turn profitable starting from the fourth quarter.

In the third quarter, Samsung SDI recorded an operating profit of 267.4 billion KRW, a 61% increase compared to the same period last year, surpassing market expectations of 204.8 billion KRW. Profitability in automotive batteries, small batteries, and electronic materials exceeded expectations.

The automotive battery segment approached its break-even point as shipments increased mainly for European PHEVs. The European electric vehicle market is experiencing explosive growth supported by additional government incentives in major countries, and Samsung SDI is among the battery manufacturers benefiting most directly.

The small battery segment recovered its peak profitability based on high utilization rates. Pouch batteries were influenced by the launch of flagship smartphones from major domestic and international customers, while cylindrical batteries showed strong sales in power tools and micro-mobility. Ji-san Kim, a researcher at Kiwoom Securities, noted, “It is important to pay attention to the increasing demand for power tools used in home interior projects and micro-mobility for personal transportation amid the COVID-19 environment.”

Among electronic materials, polarized films performed notably well. This is estimated to be due to strengthened focus on large-area, high-value-added products amid strong demand for large TVs, laptops, and tablets.

Operating profit for the fourth quarter is expected to continue its upward trend, growing 27% from the third quarter to 340.3 billion KRW.

Researcher Ji-san Kim explained, “Automotive batteries have finally succeeded in turning profitable, and ESS will leap forward centered on power projects in the Americas. Electronic materials will see improved profitability as sales of high-value-added OLED and semiconductor materials expand.”

Samsung SDI’s fifth-generation automotive batteries, scheduled for mass production starting next year, are expected to increase energy density by 20% while reducing costs by 20%, enhancing business competitiveness. Accordingly, the automotive battery segment is anticipated to establish a profitable trend on an annual basis. ESS is expected to benefit from major countries’ eco-friendly energy policies, with the company’s leading position standing out.

Sales of small cylindrical batteries for EVs are expected to expand significantly, and pouch batteries are likely to show utilization effects due to increased shipments of entry-level smartphones amid Huawei’s decline and the advancement of key customers.

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