[Click eStock] "Samsung SDI, Poor Performance Unavoidable Until First Half of This Year"

Target Price Lowered to 280,000 KRW

On the 31st, KB Securities forecasted that Samsung SDI would record sluggish performance until the first half of this year. Although the investment opinion was maintained as 'Buy,' the target stock price was lowered to 280,000 KRW.

Lee Chang-min, a researcher at KB Securities, explained the reason for the target price downgrade: "Assuming a prolonged downturn in demand from front-end customers due to political variables in the US and Europe, the cumulative operating profit estimate for 2025-2030 was reduced by 39%, from the previous 5.4 trillion KRW to 3.3 trillion KRW."

Lee also analyzed, "Despite strong performance in energy storage system (ESS) batteries, operating losses are expected due to increased fixed cost burdens caused by weak demand for small batteries and EV batteries." He added, "Small battery demand is expected to remain sluggish until the end of the year, but EV battery sales are anticipated to gradually recover from the first quarter of this year, which is the bottom as customer inventory adjustments conclude, making a company-wide return to profitability possible from the third quarter."

Meanwhile, Samsung SDI's fourth-quarter performance last year fell short of consensus. Sales recorded 3.76 trillion KRW, down 33% compared to the same period last year, and operating profit turned to a loss of 256.7 billion KRW. The researcher analyzed, "ESS batteries achieved record-high performance due to a surge in power demand from North American data centers," but "small batteries, which serve power tools and EVs, showed weak demand, and EV batteries faced increased fixed cost burdens due to intense inventory adjustments by major European customers, resulting in significant losses." He also evaluated, "In the electronic materials business, semiconductor demand was favorable, but OLED material performance deteriorated due to inventory adjustments."