Brokerage : Mirae Asset Securities
Analyst : Chul-joong Kim, Se-hoon Jung
Investment Rating : BUY (Maintained)
Target Price : KRW 1,000,000 (Maintained)
Core Momentum : Returning to operating profitability after seven quarters on data center ESS mix improvements and Hungarian fab utilization, set to drive aggressive order expansion via potential cash inflows from SDC stake monetization.
📊 1. [Valuation & Key Financial Metrics]
- Investment Rating & Target Price: BUY (Maintained), Target Price KRW 1,000,000 (Maintained, Sector Top Pick)
- Valuation of SDC Stake: The 15.2% equity stake in Samsung Display (SDC) is valued at approximately KRW 22 Trillion (applying a P/B multiple in line with global peer BOE’s 2026F valuation above 2.0x)
- Market Data (As of 2026-06-25): Share Price KRW 481,000 (Upside Potential 107.9%), Market Cap KRW 38.76 Trillion, Shares Outstanding 81.0 Million, Foreign Ownership 26.5%
- Key Financial Forecasts (2025 → 2026F → 2027F):
- Revenue: KRW 13.27 Trillion → KRW 15.58 Trillion → KRW 19.14 Trillion
- Operating Profit: KRW -1.72 Trillion → KRW 250.0 Billion (Turnaround, beating consensus of KRW -45.0 Billion) → KRW 1.72 Trillion
- Net Profit (Controlling): KRW -649.0 Billion → KRW 660.0 Billion (Turnaround) → KRW 1.71 Trillion
- EPS: KRW -8,325 → KRW 8,028 (Turnaround) → KRW 20,764
- Operating Margin (OPM): -13.0% → 1.6% → 9.0%
- ROE: -3.2% → 3.0% → 7.3%
- PER / PBR: -x / 1.0x → 59.9x / 1.7x → 23.2x / 1.6x
🚀 2. [Market Opportunities & Business Outlook]
- 2Q26 Earnings Preview: Projected Revenue of KRW 3.6 Trillion (QoQ +2%) and Operating Profit of KRW 21.2 Billion (Turnaround QoQ/YoY), beating consensus estimates (KRW -45.0 Billion) to mark the first operating profit in seven quarters. This is driven by higher shares of high-margin BBU/UPS in data center ESS and rising utilization at the Hungarian EV facility. (Additional upside exists if US ESS tariff reimbursements are recognized).
- Aggressive Order Intake & Global Market Share Recovery:
- Strategy Pivot: Shifting from past selective order-taking focused solely on profitability toward active market share expansion.
- Structural Tailwinds: Supported by global OEMs transitioning to prismatic form factors and Western policy restrictions against Chinese battery supply chains.
- Conversion Investments: Utilizing potential liquidity to secure significant order momentum across North American ESS and European EV programs, while accelerating line conversion investments in North America and Europe.
- Potential Funding from SDC Stake Monetization: Potential monetization of the company’s 15.2% stake in Samsung Display (SDC) under consideration could provide substantial liquidity to fund capacity additions for incoming orders.
📝 Editor’s Comment (Perspective)
The analyst views Samsung SDI as an aggressively expanding battery player pivoting from conservative, margin-prioritized order selection toward global market share acquisition, supported by the potential liquidity benefits of non-core asset monetization (SDC stake). This perspective emphasizes capitalizing on OEM transitions to prismatic cells and Western supply-chain realignments, deploying potential balance-sheet liquidity into North American ESS and European production line conversions for structural share recovery.
To evaluate the ongoing validity of this investment thesis, key monitoring variables include whether the potential monetization of the Samsung Display (SDC) stake materializes and the scale of actual cash proceeds, tangible order wins for North American ESS and European EV platforms in 2H26, and the execution pace of conversion CapEx across North American and European facilities. These operational milestones can be verified through upcoming quarterly earnings announcements, official IR materials, and regulatory filings.
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