[Click eStock] "Samsung SDI Achieves Success in the Used Battery Recycling Market"

Possibility of Third Quarter Earnings Exceeding Market Expectations

[Asia Economy Reporter Ji Yeon-jin] Kiwoom Securities forecasted on the 14th that Samsung SDI is promoting the recycling of used batteries at its domestic and overseas business sites, and will achieve results in the used battery circulation market as well.

Kim Ji-san, a researcher at Kiwoom Securities, stated, "Despite the uncertain macro environment, Samsung SDI is progressing as planned with automotive batteries, energy storage systems (ESS), and cylindrical batteries, and its third-quarter performance is expected to exceed market expectations." He added, "Although concerns have been raised about the slowdown in European electric vehicle demand due to the European energy crisis and soaring electricity prices, the company appears to be overcoming this with its own momentum, such as the expansion of Gen 5 battery share and the operation effect of the second plant in Hungary."

Concerns about the slowdown in European electric vehicle demand due to the European energy crisis and soaring electricity prices are negatively affecting Samsung SDI's corporate value. However, the company's third-quarter operating profit is expected to reach 496.8 billion KRW, a 33% increase compared to the previous year, surpassing the market forecast of 472.8 billion KRW.

Researcher Kim said, "Based on the trend of increasing profit contribution from automotive batteries, performance stability is expected to be high," adding, "Automotive batteries are strengthening their own momentum with the expansion of Gen 5 battery share and the operation effect of the second plant in Hungary, and shipments to plug-in hybrid electric vehicles (PHEV) are also expected to increase along with the easing of vehicle semiconductor supply issues."

He explained, "Regarding the used battery circulation business, in addition to domestic business sites, plans are underway to promote used battery recycling at the key hub in Hungary," adding, "A scrap circulation system has been established at the Cheonan and Ulsan plants, with recycling entrusted to Seongil Hightech, and EcoPro EM receiving the materials to produce cathode active materials again." Samsung SDI holds an 8.8% stake in Seongil Hightech, and its affiliate Samsung C&T also holds 4.9%.