[Click eStock] "Samsung SDI, EV Battery Profitability Improvement... Reaches 1.1 Million Won"

[Asia Economy Reporter Ji Yeon-jin] DS Investment & Securities announced on the 12th that it has raised its performance forecast for the secondary battery and electronic materials sectors of Samsung SDI this year based on strong results in the second quarter, maintained a buy investment opinion reflecting the stock price increase of global competitors, and raised the target stock price from 900,000 KRW to 1,100,000 KRW.

Seunghoe Kim, a researcher at DS Investment & Securities, explained, "With the sales of Gen5 batteries in the second half of the year, performance growth is expected in the medium-to-large battery sector, and cylindrical batteries are anticipated to expand supply for electric vehicles (EV) and energy storage systems (ESS) amid tight supply and demand." He added, "The main reason for the target price increase is that new collaborations with global automakers can become visible based on advanced competitiveness in cylindrical and prismatic batteries."

Samsung SDI confirmed improved profitability in the medium-to-large battery business, including EV batteries, through its second-quarter results. From the second half of the year, mass production of Gen5 batteries at its Hungary plant will be in full swing, making it visible that EV battery sales growth and market share expansion will follow. Since EV battery sales are expected to increase in the second half starting with supplying new BMW models from the third quarter, performance growth is expected to accelerate further.

Sales in the third quarter of this year are estimated to increase by 18.2% year-on-year to 3.6502 trillion KRW, and operating profit is expected to rise by 34.4% to 359.4 billion KRW. In particular, the medium-to-large battery sector is projected to lead performance growth by turning profitable with sales increasing 47% to 1.7233 trillion KRW and operating profit reaching 79.6 billion KRW.

Researcher Kim said, "After Volkswagen's Battery Day, automakers' demands for battery cost reduction have become visible, and preference for cylindrical and prismatic batteries, which can reduce costs through economies of scale, is inevitably increasing." He added, "Among global secondary battery companies, only a few, including Samsung SDI, can meet automakers' demands in the cylindrical and prismatic battery fields. Samsung SDI is expected to have an advantage in new orders in the trend of adopting cylindrical and prismatic batteries based on verified references and cost reduction capabilities through its small battery business."

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