[Click eStock] "Samsung SDI, Performance Improvement Begins in Q2"

Shinhan Financial Investment Report

[Asia Economy Reporter Minji Lee] Shinhan Financial Investment maintained a buy rating and a target price of 900,000 KRW for Samsung SDI on the 28th. This reflects expectations for improved second-quarter earnings and a turnaround to profitability in automotive batteries this year.

First-quarter sales are estimated at 2.9632 trillion KRW, with an operating profit of 133.2 billion KRW, representing growth of 23.6% and 141.7% respectively compared to the same period last year. Although slightly below the market estimate of 141.3 billion KRW, this was due to a seasonal downturn in the first quarter leading to decreased automotive battery sales compared to the previous quarter, and reduced domestic ESS battery demand.

From the second quarter, automotive battery sales are expected to increase significantly, driven by a sharp rise in ESS battery sales to the U.S. Sales of cylindrical batteries for electric bicycles and vacuum cleaners are also expected to remain strong. Additionally, increasing demand for polarizers, semiconductor materials, and OLED materials is positive. Operating profit is projected to improve substantially to 214 billion KRW in the second quarter and 333 billion KRW in the third quarter. Accordingly, this year’s sales are expected to reach 13.6032 trillion KRW, with operating profit rising about 20.4% and 51.9% year-on-year to 1.0195 trillion KRW.

Volkswagen recently announced plans to invest in its own battery production lines and to equip 80% of its electric vehicles with prismatic batteries by 2030. So Hyun-chul, a researcher at Shinhan Financial Investment, said, “The global electric vehicle battery market is likely to be reorganized around prismatic batteries, and Samsung SDI, which has a competitive advantage in prismatic batteries, is expected to benefit.”

Researcher So Hyun-chul added, “Although investment sentiment was dampened last month by Volkswagen’s announcement of its own battery investment, it will take more time before automakers’ in-house battery production becomes a reality. Samsung SDI is steadily preparing for the development of next-generation solid-state batteries and is also considering new battery investment locations beyond Hungary, so a stock price recovery is anticipated.”

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