[Click eStock] "Samsung SDI Sees Simultaneous Performance and Valuation Improvement... Target Price Raised to 857,000 Won"

Hana Securities has raised its target price for Samsung SDI to 857,000 won, citing simultaneous improvements in both performance and valuation factors.

On April 29, Hyunsoo Kim, a researcher at Hana Securities, stated, "For the second quarter, we forecast sales of 3.6 trillion won and an operating loss of 65 billion won, projecting a third consecutive quarter of narrowing losses." The newly suggested target price of 857,000 won represents a significant increase from the previous 469,000 won. The previous day, Samsung SDI shares closed at 680,000 won.

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Kim noted, "Since the upgrade in investment rating in February, the stock price has surged 97% over the past three months, which increases the risk of a short-term correction, but it is not the time to sell." He emphasized that both performance and valuation factors are improving together.

Samsung SDI recorded an operating loss of 155.6 billion won in the first quarter, marking its sixth consecutive quarter in the red. However, the size of the loss has decreased compared to the previous quarter for two consecutive quarters. Another quarter of narrowing losses is expected in the second quarter.

Kim explained, "In the electric vehicle (EV) segment, despite declining sales, profitability is expected to continue improving due to reduced fixed-cost burdens from decreased production capacity (CAPA) and compensation received for maintaining EV production volumes. The decline in ESS sales in the first quarter was due to the temporary response of the U.S. plant to European EV demand, but from the second quarter, a recovery is expected, with a steep growth trend anticipated in the second half of the year."

The 2028 performance estimates have also been raised by 30% compared to previous projections. Kim projected, "For EVs, starting with the launch of new Hyundai Motor models in the second half of this year, entry into new BMW projects in 2027, and the reflection of new Mercedes-Benz volume sales in 2028, the operation rate of the Hungary plant, now at around 50%, is expected to rise above 80% in 2027."

Kim also forecasted annual ESS shipments of 35GWh by 2028, stating, "This is a fully achievable figure. In particular, the logic is credible given that the increase in ESS installations is based on the shortage of power supply in North America."

Accordingly, Kim analyzed, "With estimated controlling net profit of 2 trillion won in 2028, it is possible to apply a multiple close to the upper end of the range mentioned above. If the average multiple is applied, the resulting market capitalization of 50 trillion won is likely to serve as the lower bound for the share price going forward." He added, "Given the simultaneous improvement in performance and valuation factors, the situation is different from 2024, when the share price plunged sharply after a short-term rebound."

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