[Asia Economy Reporter Park Jihwan] Hana Financial Investment evaluated on the 25th that Samsung SDI's profitability improvement is accelerating in key business sectors such as small batteries and electric vehicle batteries. The investment opinion 'Buy' was maintained, and the target price was raised by 36.4% from the previous 770,000 KRW to 1,050,000 KRW.
So far, the small battery sector, which accounts for half of the secondary battery division, has been limited to front-end demand for power tools and smartphones, resulting in relatively low growth potential. However, starting this year, sales of cylindrical batteries for electric vehicles and energy storage systems (ESS) are expected to accelerate, driving an increase in corporate value.
Kim Hyunsoo, a researcher at Hana Financial Investment, stated, "Samsung SDI has so far received an electric vehicle multiple only for the medium-to-large battery sector expressed in GWh, effectively receiving a discount," and emphasized, "Considering that cylindrical batteries for Volvo and Jaguar and ESS cylindrical battery businesses are becoming full-scale, there is no reason for the small battery sector's growth potential to be discounted."
Along with sales growth, profitability improvement is also expected. Researcher Kim said, "Samsung SDI's existing small battery sector maintains an operating profit margin of over 10%," and added, "The electric vehicle battery sector, which had been a long-term loss-making division, is expected to enter a profitable structure from the fourth quarter, showing an operating profit margin of 2-3%."
He also forecasted, "The ESS sector is expected to re-enter a profitable structure from the fourth quarter amid the blooming of the North American renewable energy business, accelerating profitability improvement in the medium-to-large battery sector."
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