Brokerage : DS Investment & Securities
Analyst : Tae-yong Choi
Investment Rating : BUY (Maintained)
Target Price : KRW 840,000 (Raised)
Core Momentum : Increasing visibility toward a 4Q26 operating profit turnaround, supported by expansion into European volume EV models and the ramp-up of the North American SPE LFP line leveraging Non-PFE supply chain strengths for ESS orders.
📊 1. [Valuation & Key Financial Metrics]
- Investment Rating & Target Price: BUY (Maintained), Target Price KRW 840,000 (Raised by shifting the valuation base year to 2027 and removing the 50% private asset discount in light of the planned Samsung Display stake monetization)
- Market Data (As of 2026-04-28): Current Price KRW 680,000 (Upside Potential 23.5%), Market Cap KRW 54.80 Trillion, Shares Outstanding (Common) 80.59 Million, Foreign Ownership 23.35%
- Key Financial Forecasts (2025F → 2026F → 2027F):
- Revenue: KRW 13.27 Trillion → KRW 15.31 Trillion → KRW 19.13 Trillion
- Operating Profit: KRW -1.998 Trillion → KRW -236.0 Billion (Loss Narrowed) → KRW 1.21 Trillion (Turnaround)
- Pre-tax Profit: KRW -1.36 Trillion → KRW 115.0 Billion (Turnaround) → KRW 1.46 Trillion
- Net Profit (Controlling): KRW -649.0 Billion → KRW 30.0 Billion (Turnaround) → KRW 951.0 Billion
- EPS: KRW -8,426 → KRW 367 (Turnaround) → KRW 12,290
- Operating Margin (OPM): -15.1% → -1.5% → 6.3%
- ROE: -3.2% → 0.1% → 4.7%
- PER / PBR: -80.7x / 2.6x → 1,854.4x / 2.8x → 55.3x / 2.7x
- EV/EBITDA: 610.5x → 28.2x → 15.3x
🚀 2. [Market Opportunities & Business Outlook]
- 1Q26P Earnings Review: Revenue reached KRW 3.6 Trillion (QoQ -7.3%, YoY +12.6%) and Operating Loss came in at KRW -155.6 Billion (Loss continued QoQ/YoY), beating consensus. Margin improvement was driven by favorable mix shifts in ESS and small batteries. ESS delivered mid-single-digit margins despite seasonal headwinds due to higher UPS mix (rising from 25% in 4Q25 to 30% in 1Q26). Small batteries improved on rising BBU and tabless power tool shipments. Prismatic EV losses narrowed backed by European shipments from the US SPE plant (recognizing ~50% of the KRW 80.5 Billion AMPC) and additional compensation.
- 2Q26F Earnings Outlook: Projected Revenue of KRW 3.6 Trillion (QoQ +0.9%, YoY +13.4%) and Operating Loss of KRW -70.2 Billion. Loss reduction continues driven by the mass production of new European volume EV models in Hungary and SPE European shipments. ESS profitability is expected to expand to high-single digits on deferred shipments and higher UPS contribution.
- 4Q26 Turnaround & Medium-Term Catalysts:
- ESS Acceleration: Full-year ESS revenue is projected to grow over +50% YoY, propelled by the startup of the US SPE LFP line in 4Q26 and robust UPS demand. Non-PFE supply chain advantages are expected to serve as core competitive drivers for winning hyperscaler orders and triggering an ESS valuation re-rating.
- EV Segment Expansion: European volume model entry and the recovery of Hungarian plant utilization (1Q26 50% → 2H26 70%) will help overcome previous exposure limits concentrated in premium OEM segments.
📝 Editor’s Comment (Perspective)
The analyst views Samsung SDI as a turnaround battery manufacturer overcoming historical customer concentration in premium segments by entering mass-market European volume models and deploying Non-PFE-compliant LFP ESS solutions to win global tech accounts. This perspective places primary importance on operational recovery milestones—such as rising Hungarian plant utilization and the 4Q26 launch of North American LFP capacity securing a return to operating profitability—alongside balance sheet valuation normalization following the planned monetization of its Samsung Display stake.
To evaluate the ongoing validity of this investment thesis, key monitoring factors include the commercial launch and yield stabilization of the US SPE LFP line in 4Q26, the recovery of Hungarian plant utilization toward the 70% level in 2H26, and concrete new ESS order wins from global hyperscalers leveraging Non-PFE supply chain compliance. These operational developments can be tracked through upcoming quarterly financial announcements, company IR presentations, and periodic statutory filings.
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