[Click eStock] "Samsung SDI's Q1 Earnings Expected to Be in Line with Forecast"

DB Financial Investment Issues 'Buy' Rating and 370,000 KRW Target Price... Closing Price on 31st Last Month Was 240,500 KRW

[Asia Economy Reporter Kum Bo-ryeong] Expectations have emerged that Samsung SDI's first-quarter earnings will be in line with forecasts.

According to DB Financial Investment on the 1st, Samsung SDI's first-quarter operating profit is estimated at 23 billion KRW. This represents an 80.6% decrease compared to the previous year, but a 14.4% increase compared to the previous quarter. It appears to align with the initial estimates by DB Financial Investment.

Kwon Seong-ryul, a researcher at DB Financial Investment, explained, "Although small secondary batteries were affected by COVID-19, medium and large batteries reduced losses as expected, so the company's overall operating profit will not deviate significantly from expectations. Small secondary batteries will remain at a slightly profitable level due to the poor performance of cylindrical batteries and additional weakness in polymer batteries for smartphones. Medium and large batteries, mainly EV and ESS, were largely unaffected by mid- to long-term projects, and losses are expected to be significantly reduced from the large deficit in the fourth quarter of last year."

For small batteries, polymer batteries account for about 35% of sales, but the market response to the captive customer's flagship model has been poor, which is expected to have a negative impact. Researcher Kwon said, "Even cylindrical batteries, which account for 60%, may experience delayed demand recovery, so it is realistic to take a conservative view on small batteries. Samsung SDI's small battery sales are expected to decrease by 3.6% this year, and operating profit margin is also expected to decline compared to last year." However, he added, "Losses in medium and large batteries are expected to shrink significantly this year, with EV battery sales increasing by 72% and ESS battery sales increasing by about 10%, resulting in an expected profit improvement effect of about 400 billion KRW."

DB Financial Investment gave Samsung SDI a 'Buy' rating with a target price of 370,000 KRW. The closing price on the 31st of last month was 240,500 KRW.