Foreign Love Calls and Rising Value... Samsung SDI Expects Upward Trend Again This Year

[Asia Economy Reporter Lee Seon-ae] The securities industry is raising the valuation (target price) of Samsung SDI, increasing expectations for a rise in its stock price. The stock price, which had continuously risen last year due to growth expectations in the secondary battery industry, has continued to receive strong support from foreign investors this year, drawing a clear upward trend by hitting an all-time high.

According to the Korea Exchange on the 25th, Samsung SDI opened at 797,000 KRW, up 0.63% from the previous trading day. On the 22nd, it closed at 792,000 KRW, up 6.31% from the previous day, and during the session, it surpassed 809,000 KRW, marking an all-time high. The driving force behind the rising stock price is foreign investors. Samsung SDI ranked second among the most purchased stocks by foreigners last week (18th to 22nd), with a total purchase amount of 264.8 billion KRW.

Securities firms are continuously raising their target prices. Hana Financial Investment raised Samsung SDI’s target price by 36.4%, from 770,000 KRW to 1,050,000 KRW on the same day. This is based on the judgment that profitability will improve alongside sales growth. Kim Hyun-soo, a researcher at Hana Financial Investment, analyzed, "Samsung SDI’s existing small battery division maintains an operating profit margin of over 10%, and the electric vehicle battery division, which had been a long-term loss-making business unit, is expected to enter a profitable structure from the fourth quarter by achieving an operating profit margin of 2-3%. The energy storage system (ESS) division is also expected to accelerate profitability improvement in the medium and large battery division by re-entering profitability from the fourth quarter amid the blooming North American renewable energy business."

Earlier, Hyundai Motor Securities raised Samsung SDI’s target price to 1,000,000 KRW, citing profitability improvement. Hyundai Motor Securities forecasted Samsung SDI’s sales this year to increase by 21.5% year-on-year to 14 trillion KRW, and operating profit to rise by 68.7% to 1.3 trillion KRW. Kang Dong-jin, a researcher at Hyundai Motor Securities, said, "This year, the secondary battery-related performance is expected to turn profitable, expanding investment capacity. If aggressive investments for high growth are confirmed, further stock price revaluation will follow."

Korea Investment & Securities (950,000 KRW), Samsung Securities (900,000 KRW), SK Securities (870,000 KRW), and Mirae Asset Daewoo (950,000 KRW) also raised their target prices for Samsung SDI.