Brokerage : iM Securities
Analyst : Won-seok Jung, Jung-ha Park (RA)
Investment Rating : Buy (Maintain)
Target Price : KRW 450,000 (Raised)
Core Momentum : Building on 4Q25 loss narrowing via client compensation and US ESS ramp-up, rapid growth in North American ESS output (~8x YoY) and US regulatory restrictions on Chinese ESS batteries drive a structural medium-term earnings recovery, with ESS operating profit projected to reach KRW 1.4 Trillion by 2028.
📊 1. [Valuation & Key Financial Metrics]
- Investment Rating & Target Price: Buy (Maintain), Target Price KRW 450,000 (Raised using an SOTP method applying global peer average EV/EBITDA multiples to 2027F EBITDA and incorporating the Samsung Display equity value)
- Market Data (As of 2026-02-02): Close KRW 356,000 (Upside Potential 26.4%), Market Cap KRW 29.00 Trillion, Capital Stock KRW 357.0 Billion, Shares Outstanding 82.20 Million, Foreign Ownership 23.6%
- Key Financial Forecasts (2025E → 2026E → 2027E):
- Revenue: KRW 13.27 Trillion → KRW 15.54 Trillion (YoY +17%) → KRW 19.60 Trillion
- Operating Profit: KRW -1.72 Trillion (Loss Continued) → KRW -459.0 Billion (Loss Narrowed Significantly) → KRW 698.0 Billion (Turnaround)
- Net Profit: KRW -545.0 Billion (Loss Continued) → KRW -210.0 Billion (Loss Narrowed) → KRW 597.0 Billion (Turnaround)
- EPS: KRW -7,084 → KRW -2,556 (Loss Continued) → KRW 7,265 (Turnaround)
- BPS: KRW 268,114 → KRW 275,560 → KRW 292,801
- ROE: -2.6% → -0.9% → 2.6%
- PBR: 1.3x → 1.3x → 1.2x
- EV/EBITDA: 34.9x → 14.9x → 9.0x
🚀 2. [Market Opportunities & Business Outlook]
- 4Q25 Earnings Review (Losses Narrowed on Compensation & ESS Gains):
- Consolidated Results: Revenue reached KRW 3.9 Trillion (YoY +3%, QoQ +26%) and Operating Loss was KRW -299.0 Billion (Loss continued YoY/QoQ), beating consensus revenue (KRW 3.6 Trillion) and meeting operating profit consensus (KRW -301.4 Billion).
- Segment Details: Mid-to-large EV battery losses narrowed substantially due to one-off customer compensation for shortfall commitments. Small batteries continued operating in the red on soft US housing trends and channel destocking. ESS swung to operating profitability as North American fab operations drove shipments up ~40% QoQ alongside recognized AMPC credits (estimated at ~KRW 58.0 Billion).
- 2026 Outlook (Passing the Worst-Case Scenario):
- 1Q26 Outlook: Revenue projected at KRW 3.4 Trillion (YoY +7%, QoQ -12%) and Operating Loss at KRW -272.0 Billion (Loss continued YoY/QoQ), reflecting seasonal off-peak trends across electronic materials and EV batteries.
- Annual Improvement: Full-year operating loss is projected to narrow significantly to KRW -459.0 Billion. Despite SPE plant headwinds and BMW’s CATL adoption, EV cell losses are forecast to narrow by ~KRW 880.0 Billion YoY supported by 2H26 Hyundai supply kickoffs, compensation, lithium-driven ASP increases, and SPE line conversions to ESS production.
- Medium-Term ESS Opportunities & Realistic Robotics Outlook:
- North American Production Expansion: North American ESS production volume is set to jump ~8x YoY, accelerating AMPC-driven profit growth.
- Regulatory Tailwinds: Beginning in 2026, US restrictions on Chinese ESS provide structural market share opportunities; full-year ESS operating profit is estimated to surge from ~KRW 83.0 Billion in 2025 to ~KRW 1.4 Trillion in 2028.
- Caution on Short-Term Robotics Hype: The global humanoid battery market is projected to remain below KRW 1.0 Trillion through 2030, warranting caution against short-term speculative narratives.
📝 Editor’s Comment (Perspective)
The analyst views Samsung SDI as a battery manufacturer positioned to narrow full-year operating losses significantly in 2026, navigating past worst-case EV macro concerns by leveraging rapid growth in North American ESS output (~8x YoY) and structural market share gains from US regulatory restrictions on Chinese ESS suppliers. This perspective places primary importance on the long-term earnings inflection of the ESS business (operating profit projected to surge to KRW 1.4 Trillion by 2028) and realigned manufacturing lines, rather than near-term 1Q seasonal weakness or speculative short-term humanoid robotics narratives.
To evaluate the ongoing validity of this investment thesis, key monitoring factors include the ~8x expansion in North American ESS output and associated quarterly AMPC tax credit generation, the commercial ramp-up of new battery shipments for European Hyundai programs in 2H26, and full-year progress toward narrowing operating losses to KRW -459.0 Billion in 2026. These operational milestones can be verified through upcoming quarterly earnings releases, official company IR presentations, and statutory regulatory filings.
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Source: This content has been structured and newly written based on officially disclosed financial facts and data from brokerage reports.
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