[Click eStock] "Samsung SDI, Sharp Growth in Cylindrical Batteries Expected in 4Q"

Steady Growth in Electric Vehicle-Oriented Sales and Profitability Improvement

[Asia Economy Reporter Minwoo Lee] Samsung SDI achieved better-than-expected strong earnings as sales of cylindrical batteries increased and profitability improved. This trend is expected to continue in the fourth quarter as the rapid growth of cylindrical batteries persists.

On the 3rd, Hana Financial Investment maintained its 'Buy' rating on Samsung SDI and raised the target price by 6.2% to 1.2 million KRW, citing these factors. The closing price the previous day was 731,000 KRW.

In the third quarter of this year, Samsung SDI recorded consolidated sales of 3.4398 trillion KRW and operating profit of 373.5 billion KRW, representing increases of 11.4% and 39.7% respectively compared to the same period last year. The operating profit exceeded the consensus (market forecast) by 7.5%, marking strong performance.

The mid-to-large battery segment, which accounts for 40% of sales, saw a 20% increase in sales year-on-year due to continued growth in demand for electric vehicle and energy storage system (ESS) batteries. However, sales declined about 10% compared to the previous quarter due to production disruptions in electric vehicles caused by semiconductor supply shortages.

The small battery segment, also accounting for about 40% of sales, increased sales by 12% quarter-on-quarter and 16% year-on-year. This is attributed to new sales growth of cylindrical batteries for electric vehicles. The electronic materials segment saw a 2% decrease in sales year-on-year as panel demand slowed due to reduced set demand in the third quarter, leading to a drop in polarizing film prices. However, OLED material demand increased significantly ahead of the iPhone 13 launch, resulting in about a 12% increase compared to the previous quarter.

Strong earnings are expected to continue into the fourth quarter. Hana Financial Investment forecasts consolidated sales of 4.173 trillion KRW and operating profit of 427 billion KRW. This is due to the steeper-than-expected increase in sales and profitability improvement in the cylindrical battery segment. Researcher Hyunsoo Kim of Hana Financial Investment said, "Generally, the fourth quarter is a period when cylindrical battery sales growth stagnates, but sales related to electric vehicles and others are growing so rapidly that sales can increase by about 20% compared to the third quarter," adding, "In this process, an additional margin increase is expected due to mix improvement."

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