Brokerage : Shinhan Securities
Analyst : Jin-myung Lee, Myung-joo Kim
Investment Rating : BUY (Maintained)
Target Price : KRW 700,000 (Lowered)
Core Momentum : Initiating a sequential earnings turnaround starting with a 2Q operating profit after seven quarters, set to gain traction in 2H26 via higher European EV plant utilization and North American LFP capacity ramp-up.
📊 1. [Valuation & Key Financial Metrics]
- Investment Rating & Target Price: BUY (Maintained), Target Price KRW 700,000 (Lowered by 13% as the target EV/EBITDA multiple was adjusted from 15x to 11x following global peer multiple contractions, despite a +20% upward revision in 2027F earnings estimates)
- Market Data (As of 2026-07-16): Current Price KRW 434,500 (Upside Potential 61.1%), Market Cap KRW 35.01 Trillion, Shares Outstanding 80.6 Million, Foreign Ownership 26.3%
- Key Financial Forecasts (2025 → 2026F → 2027F):
- Revenue: KRW 13.27 Trillion → KRW 15.68 Trillion → KRW 19.69 Trillion
- Operating Profit: KRW -1.72 Trillion → KRW 226.3 Billion (Turnaround) → KRW 1.60 Trillion
- Net Profit (Controlling): KRW -649.5 Billion → KRW 713.6 Billion (Turnaround) → KRW 2.07 Trillion
- ROE: -3.2% → 3.2% → 8.5%
- PER / PBR: -x / 1.0x → 52.3x / 1.6x → 18.1x / 1.5x
- EV/EBITDA: 87.1x → 19.0x → 10.3x
- Revisions: Earnings Forecast Revised Upward, Valuation Multiple Revised Downward
🚀 2. [Market Opportunities & Business Outlook]
- 2Q26 Preview (Across-the-Board Improvement): Operating profit is projected at KRW 14.3 Billion (Turnaround QoQ), marking the first positive quarter in seven quarters and beating the market consensus of KRW -44.9 Billion.
- Mid-to-Large Batteries: Forecast Revenue of KRW 2.2 Trillion (QoQ -4%) and Operating Profit of KRW 59.4 Billion (Turnaround QoQ). In EV, while top-line expansion is muted due to base effects, losses are set to narrow backed by European shipments from US JV output and expanded AMPC benefits. In ESS, despite domestic project delivery deferrals, strong UPS demand and US tariff refund gains are driving significant profit increases.
- Small Batteries: Revenue up +6% QoQ with narrowed operating losses, supported by robust demand for Battery Backup Units (BBU) and power tools.
- Electronic Materials: Sequential top-line and profit growth anticipated on higher semiconductor materials shipments and easing OLED off-peak seasonality.
- 2H26 Core Operational Recovery: From 3Q26, core business fundamentals will rebound driven by improved European EV utilization and higher ESS volume. From 4Q26, commercial operations of North American LFP facilities and increased AMPC credits will support sequential quarterly earnings expansion.
📝 Editor’s Comment (Perspective)
The analyst views Samsung SDI as a battery manufacturer transitioning from one-off relief into a full-fledged operational turnaround, anchored by rising European EV utilization and new North American LFP production. This perspective underscores that solid ESS profitability is establishing a dependable floor for corporate earnings, while the fundamental growth driver shifts from one-off tariff refunds toward structural core business recovery.
To assess the continuing validity of this investment thesis, key monitoring factors include the tangible recovery of plant operating rates across European EV lines in 3Q26, the on-schedule commercial ramp-up and yield metrics of the North American LFP line in 4Q26, and incremental ESS order wins in North America to ensure medium-term earnings visibility. These operational milestones can be verified through upcoming quarterly earnings releases, company IR briefings, and regulatory disclosures.
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