10-Day 25% High Kick... Samsung SDI Soars to All-Time High

[Asia Economy Reporter Koh Hyung-kwang] Samsung SDI's stock price is on a relentless rise since the beginning of the year. Fueled by expectations for electric vehicle growth, it has been breaking all-time highs and continuing its soaring momentum. Its market capitalization is approaching 20 trillion KRW, aiming for a top 10 ranking in market cap.

According to the Korea Exchange on the 23rd, Samsung SDI closed at 286,000 KRW on the KOSPI market the previous day, up 3.8%, marking an all-time high. It has risen more than 20% just this month. Notably, except for the one day of stagnation on the 21st within the last 10 trading days, the stock price increased on the other 9 days. The rise during this period reached 24.8%.

Samsung SDI's stock price fluctuated between 210,000 and 230,000 KRW throughout last year, remaining within a trading range. It even dropped to the low 200,000 KRW range due to consecutive energy storage system (ESS) fires. However, buying surged sharply this year, starting an upward trend.

Compared to last year's low of 203,500 KRW, it has risen 42%. Considering it was 75,600 KRW on August 28, 2015, it has jumped 278.3% in about five years and four months. Based on the closing price the previous day, Samsung SDI's market capitalization was 19.6666 trillion KRW, just shy of 20 trillion KRW. Its market cap ranking on the KOSPI also rose to 13th.

The biggest contributor to the stock price rise is foreign investors. From the 10th to the 21st, foreigners net purchased 205 billion KRW worth of Samsung SDI shares. During this period, Samsung SDI was the stock most bought by foreigners, about twice (approximately 100 billion KRW) the amount of the second-ranked LG Chem (103 billion KRW). Institutions also bought about 28 billion KRW worth.

The stock price reflects expectations for clear earnings improvement this year. Kim Hyun-soo, a researcher at Hana Financial Investment, said, "Operating profit in Q4 last year is expected to decrease by 95% year-on-year due to one-time ESS costs, but this year, profitability will accelerate with increased electric vehicle battery volume and the disappearance of one-time ESS costs in the medium and large battery segment. Considering the growth potential in the electric vehicle battery sector, the current stock price is not expensive."

Researcher Noh Kyung-tak of Eugene Investment & Securities predicted, "For Samsung SDI, which has a high battery sales ratio in the European market, electric vehicle battery sales this year will increase by 46% from the previous year to reach 3.4 trillion KRW." According to FnGuide, securities firms forecast Samsung SDI to record an operating profit of 927.3 billion KRW this year.