[Click eStock] "Samsung SDI, Operating Profit Returns to 1 Trillion Won in 2027"

Hyundai Motor Securities announced on the 17th that it is lowering the target price of Samsung SDI to 240,000 KRW, reflecting the dilution of shareholder value due to a 2 trillion KRW rights offering and a downward revision of earnings forecasts.

Earlier, on the 14th, Samsung SDI held a board meeting and resolved to conduct a rights offering to raise funds for facility investments. The number of shares in this rights offering, which will proceed through shareholder allocation followed by a general public offering of unsubscribed shares, is 11,821,000, with a capital increase ratio of 16.8%.

Samsung SDI plans to invest approximately 904.7 billion KRW of the funds raised from this rights offering into a U.S. joint venture established with General Motors (GM). The target date for mass production of electric vehicle batteries is 2027, and the large-scale production facility will be capable of producing batteries for about 360,000 units annually, with a maximum capacity of 480,000 units.

Regarding this, Kang Dong-jin, a researcher at Hyundai Motor Securities, evaluated, "The signal that mass production of all-solid-state batteries is progressing without setbacks is positive, and future investments utilizing Samsung Display's shares are also expected."

However, Researcher Kang also commented, "It is unfortunate that the company’s ability to generate its own cash flow has declined due to prolonged weakness in cylindrical batteries and uncertainties among European customers."

He added, "The expansion of the Stellantis Plant 1 line will be carried out as conservatively as possible due to the replacement of Stellantis management and demand uncertainties," and said, "Only about 8 GWh out of the initially planned 33 GWh expansion is reflected, leading to a significant downward revision of the 2025 earnings forecast, and the second plant is uncertain, so the 2026 earnings forecast is also lowered."

Researcher Kang added, "Although the valuation has already been significantly lowered reflecting most of the negative factors, momentum such as the concretization of future demand for all-solid-state batteries and new orders will be necessary for a stock price rebound."