[Click eStock] Samsung SDI, Q4 Gen5 Expectations

[Asia Economy Reporter Junho Hwang] Kiwoom Securities has maintained its investment rating for Samsung SDI as 'Buy' and set the target price at 900,000 KRW.

Samsung SDI's operating profit for the third quarter of this year was 373.5 billion KRW, exceeding market expectations (347.4 billion KRW). Although automotive battery sales declined due to semiconductor supply shortages and OEM production disruptions, small batteries and electronic materials performed better than expected.

Automotive batteries saw a decrease in demand mainly for PHEVs along with production disruption issues. However, the expansion of the EV segment helped maintain a profitable trend. The new Gen 5 line began full-scale operation, and supply to BMW's new model also started.

ESS sales temporarily declined as major projects were advanced from the second quarter. Cylindrical batteries showed stronger-than-expected sales growth, driven by robust demand for M-mobility and power tools, along with expanded sales for EVs. Based on tight supply conditions, prices rose, achieving record-high profitability. In electronic materials, polarizing films offset the industry slowdown by focusing on large TVs. Sales of high-value-added semiconductor patterning materials (SOH) and OLED materials also showed strong performance.

The fourth quarter is expected to lead performance improvement with a recovery in automotive batteries. Operating profit for Q4 is estimated at approximately 419.3 billion KRW, about a 70% increase year-on-year. Cylindrical batteries will enjoy a boom phase through active capacity expansion, and display materials will respond to the opening of the QD-OLED market.

Ji-san Kim, a researcher at Kiwoom Securities, said, "Although some sales disruptions in automotive batteries will continue, supply expansion centered on new Gen 5 models will lead performance improvement," adding, "ESS, which had been mainly for power applications, will see increased sales of high-value-added UPS and home products, and cylindrical batteries will continue strong demand trends for power tools, M-mobility, and EVs."

He continued, "Samsung SDI has established a joint venture for electric vehicle batteries in the United States, starting with an annual capacity of 23 GWh in 2025 and expanding to 40 GWh," and stated, "It is positive in that it has laid the foundation to lead the U.S. market based on strategic partnerships."

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