Brokerage : DS Investment & Securities Analyst : Choi Tae-yong Investment Rating : BUY (Maintained) Target Price : KRW 840,000 (Maintained)
Core Momentum : Despite the dissipation of one-off tariff refunds, core operating profitability is set to turn positive driven by surging ESS sales and small battery recovery, reinforced by a massive ESS backlog secured through 2029 and new growth catalysts in humanoid applications.
📊 1. [Valuation & Key Financial Metrics]
- Rating & Target Price: BUY (Maintained), Target Price KRW 840,000 (Maintained)
- Current Stock Price & Upside: KRW 397,000 (as of July 31, 2026), Upside Potential 111.6%
- Market & Equity Data: KOSPI 6,595.5 pt, Market Cap KRW 31.99 Trillion, Total Shares Outstanding 80.59 Million, Foreign Ownership 26.4%
- Financial Performance & Estimates Summary:
- 2023: Revenue KRW 21.44 Trillion, Operating Profit KRW 1.55 Trillion (OP Margin 7.2%), Pre-tax Profit KRW 2.38 Trillion, Net Profit (Controlling) KRW 2.01 Trillion, EPS KRW 28,402 (Growth 2.9%), ROE 11.5%, PER 16.3x, PBR 1.8x, EV/EBITDA 11.2x
- 2024: Revenue KRW 16.59 Trillion, Operating Profit KRW 363.0 Billion (OP Margin 2.2%), Pre-tax Profit KRW 527.0 Billion, Net Profit (Controlling) KRW 599.0 Billion, EPS KRW 8,457 (Growth -70.2%), ROE 3.1%, PER 28.7x, PBR 0.9x, EV/EBITDA 12.0x
- 2025: Revenue KRW 13.27 Trillion, Operating Loss KRW 1.72 Trillion (OP Margin -13.0%), Pre-tax Loss KRW 1.36 Trillion, Net Loss (Controlling) KRW 649.0 Billion, EPS -KRW 8,059 (Loss Sustained), ROE -3.2%, PER -33.4x, PBR 1.0x, EV/EBITDA 81.5x
- 2026(F): Revenue KRW 15.68 Trillion, Operating Profit KRW 373.0 Billion (OP Margin 2.4%), Pre-tax Profit KRW 772.0 Billion, Net Loss (Controlling) KRW 10.0 Billion, EPS -KRW 130 (Loss Sustained), ROE 0.0%, PER -3,064.5x, PBR 1.5x, EV/EBITDA 15.1x
- 2027(F): Revenue KRW 19.53 Trillion, Operating Profit KRW 1.88 Trillion (OP Margin 9.6%), Pre-tax Profit KRW 2.02 Trillion, Net Profit (Controlling) KRW 29.0 Billion, EPS KRW 374 (Turnaround to Profit), ROE 0.1%, PER 1,061.9x, PBR 1.5x, EV/EBITDA 9.6x
🚀 2. [Market Opportunities & Business Outlook]
- 2Q26P Preliminary Earnings Review:
- Preliminary revenue came in at KRW 3.8 Trillion (+5.4% QoQ, +18.5% YoY), with operating profit reaching KRW 203.8 Billion (including AMPC; turning profitable QoQ and YoY), beating consensus.
- Driven by a one-off US reciprocal tariff refund of ~KRW 196.0 Billion attributed to ESS, while AMPC rose to KRW 107.7 Billion (+33.8% QoQ, +63.2% YoY) on expanded US local production.
- Stripping out the tariff refund, standalone operating profit stood at KRW 8.0 Billion, led by solid UPS/BBU demand, improved small battery utilization, and favorable FX.
- Non-operating gains included KRW 401.8 Billion in equity-method investment income from affiliate valuation gains.
- 3Q26F Core Operations Turnaround:
- Forecast revenue of KRW 4.0 Trillion (+6.5% QoQ, +31.5% YoY) and operating profit of KRW 113.5 Billion (-44.3% QoQ, turning profitable YoY).
- Underlying business operations (excluding tariff refunds and AMPC) are expected to turn profitable.
- ESS segment revenue is projected to surge 30–40% QoQ while maintaining double-digit operating margins; small battery operations are set to turn profitable on full utilization of available capacity and high-margin product mix.
- Automotive battery sales face short-term contraction following the conclusion of the Stellantis US-to-Europe export project, but losses are expected to narrow on expanding volume model supply in Europe.
- North American prismatic LFP cell mass production is slated to start in October, with shipments of SBB 2.0 initiating within the year.
- ESS Backlog Expansion & Humanoid Physical AI Pipeline:
- Secured order backlogs substantially cover capacity through 2029; incorporating 2H European projects will result in orders exceeding existing capacity from 2028 onward.
- Additional capacity expansion plans for BBU and UPS applications are under internal review, which serves as a major catalyst for ESS valuation re-rating.
- All-solid-state battery samples are being supplied in 2H, targeting mass production in 2H 2027 with humanoid robotics identified as the primary commercial launch target.
- Active supply of high-power cylindrical cells to humanoid manufacturers supports ongoing Physical AI momentum and potential contract expansions.
📝 Editor’s Comment (Perspective)
The analyst views Samsung SDI not merely as a temporary beneficiary of one-off tariff refunds, but as a business undergoing a structural recovery in core underlying operating profitability driven by surging ESS volume and utilization recovery in premium small batteries. The thesis places strong emphasis on the company’s ability to transcend near-term EV demand uncertainties through an extensive ESS order book extending through 2029, alongside strategic positioning in next-generation Physical AI applications, including humanoid-targeted solid-state and high-power cylindrical batteries.
To verify whether this investment thesis materializes going forward, key monitoring points include confirming the actual operating turnaround of core ESS and small battery segments in Q3 post one-off eliminations, tracking the timely start of North American prismatic LFP cell production in October alongside SBB 2.0 deliveries, and monitoring formal decisions regarding additional BBU/UPS capacity expansions as well as commercial supply contract visibility for humanoid robotics applications. These developments can be tracked through upcoming quarterly earnings releases, official IR materials, and regulatory filings.
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