[Click eStock] "Samsung SDI, Lowers This Year's Earnings Forecast"…Target Price Down 11%

[Asia Economy Reporter Ji Yeon-jin] Samsung Securities announced on the 17th that it has lowered the performance forecast for Samsung SDI this year and cut the target stock price by 11% from the previous to 800,000 KRW.

Jang Jeong-hoon, a researcher at Samsung Securities, said, "The fourth quarter of last year was an off-season with no performance momentum, resulting in a 22% correction compared to the previous high point (third quarter)," but added, "The possibility of a revaluation of Samsung SDI, which has a high battery proportion after the new listing of LG Energy Solution (LGES), is positive."

Samsung SDI's consolidated sales in the fourth quarter of last year are expected to be 3.8 trillion KRW, and operating profit is expected to be 329.7 billion KRW, falling short of market expectations. This is 96 billion KRW below the operating profit scale initially forecasted by Samsung Securities. The significant factor is the one-time special bonus paid to major Samsung affiliates (estimated at 75 billion KRW by the company), and the slower-than-expected growth rate of electric vehicle sales in Europe, a major front market in the fourth quarter, compared to the previous quarter's growth rate (+60%), which lowered performance expectations for the automotive battery sector.

Researcher Jang said, "Although there were sales disruptions due to vehicle semiconductor supply issues, it is also estimated that European automakers, who need to meet carbon emission targets, pushed electric vehicle sales relatively more in the first half of the year, reducing sales pressure in the second half."

This year, Samsung SDI's annual sales have been revised down by 6% to 17 trillion KRW, and operating profit to 1.7 trillion KRW. This reflects the lower-than-expected growth in European electric vehicle sales in the second half of last year, leading to a reduction in battery sales in the automotive sector from 6.5 trillion KRW to around 6 trillion KRW this year.