[Click eStock] "Samsung SDI 2Q Earnings Will Stand Out... Stock Price Drop Is a Buying Opportunity"

[Asia Economy Reporter Lee Myunghwan] DB Financial Investment announced on the 31st that it maintains a buy rating and a target price of 920,000 KRW for Samsung SDI. This is because the company's second-quarter earnings this year are expected to be the most outstanding among IT companies.

DB Financial Investment projects Samsung SDI's operating profit to increase by 33% year-on-year to 393 billion KRW. Sales are expected to grow across small batteries, automotive batteries, and energy storage systems (ESS), making it the most prominent among large IT companies. Small batteries are expected to see performance growth due to market expansion in power tools and price increases. Automotive batteries are expected to increase sales centered on Gen.5 batteries, and ESS supply is expected to expand mainly through power projects in the Americas.

On the 25th, Samsung SDI disclosed its joint investment in a factory with Stellantis in the United States. The joint venture (JV) between the two companies plans to complete investment by August 2025, start mass production at 23 GWh (gigawatt-hours) annually, and then expand to 33 GWh. Indiana, USA, where the investment is located, offers good incentives and is advantageous for collaboration due to the proximity of Stellantis' parts factory. The large factory site also facilitates additional expansion investments. This investment is analyzed to be an opportunity for Samsung SDI to increase its market share with Stellantis.

However, despite the domestic stock market rising on the 30th, Samsung SDI's stock price fell by 1.5%. It is presumed that news of Chinese competitor CATL supplying cylindrical batteries to BMW influenced this. Nevertheless, DB Financial Investment pointed out that known negative factors such as intensified competition in prismatic batteries, market share decline, and automakers' battery internalization are not new developments.

The Volkswagen Group plans to equip 80% of its electric vehicle models with prismatic batteries by 2030. DB Financial Investment analyzed that as European automakers centered on Volkswagen increase adoption of prismatic batteries, the market will grow and competition will naturally intensify. With Samsung SDI recently signing the main JV contract with Stellantis, the investment stance is changing, and its relatively weak market share with Stellantis is expected to gradually increase. Battery internalization is seen as something that must coexist with external procurement.

Kwon Seongryul, a researcher at DB Financial Investment, advised, "Even in a changing environment, if an optimized strategy is found in medium-to-large batteries, performance will be visible," adding, "A stock price decline due to unnew news is a good buying opportunity."

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