[Click eStock] "Samsung SDI, Stable Earnings and Rising Expectations for North American Market Expansion"

[Asia Economy Reporter Kwon Jae-hee] Kiwoom Securities maintained its investment opinion of 'Buy' and target price of 900,000 KRW for Samsung SDI on the 24th.

Although the pace of business expansion appeared passive compared to competitors, efforts to expand the US joint venture (JV), diversification of battery procurement sources through global OEMs, and expectations of benefits from the US Inflation Reduction Act (IRA) have stood out, leading to an analysis that a reasonable revaluation should be made.

Kiwoom Securities pointed out that regarding the major issue of the IRA, only Korean battery companies, including Samsung SDI, can proactively respond in the mid to long term, viewing this as an opportunity. Samsung SDI plans to expand its North American manufacturing base through joint ventures and has the capability to localize parts and materials simultaneously. Samsung SDI is making efforts to complete the joint venture with Stellantis early to meet the IRA parts requirements, and it is necessary to monitor the industry's common approach to localize more than 60% of mineral requirements after 2025.

The possibility of establishing joint ventures with GM and Volvo is also seen positively.

Researcher Kim Ji-san of Kiwoom Securities analyzed, "This is evidence that Samsung SDI is the only company capable of supplying high-output, high-density prismatic batteries in North America," adding, "If successful, it will lay the foundation for rapid advancement in the North American market."

The next-generation cylindrical form factor 46Φ battery is expected to secure customers and orders soon. The Gen 6 battery, with a nickel content of 91%, will achieve an energy density performance of over 700Wh/L and is expected to be the spearhead for targeting the US market in the IRA era.

Researcher Kim said, "Even during the economic downturn, stable performance momentum continues, and it will meet market expectations," adding, "The expected price-to-earnings ratio (PER) for this year is 24 times, which is significantly undervalued compared to competitors."