Brokerage : Mirae Asset Securities
Analyst : Chul-joong Kim, Min-hui Kang
Investment Rating : BUY (Maintained)
Target Price : KRW 450,000 (Maintained)
Core Momentum : Potential cash inflow of ~KRW 10 Trillion and major balance-sheet deleveraging assuming an SDC stake sale, paired with expanding order backlogs from North American ESS line conversions and a 6-month delivery lead-time advantage.
📊 1. [Valuation & Key Financial Metrics]
- Investment Rating & Target Price: BUY (Maintained), Target Price KRW 450,000 (Maintained, Sector Top Pick)
- SOTP Valuation Breakdown: EV business value conservative haircut to zero; ESS business value set at KRW 29.0 Trillion reflecting North American growth, while SDC stake value is raised from KRW 3.5 Trillion to KRW 10.0 Trillion (P/E stands at ~6x assuming partial monetization of KRW 3.5 Trillion in 2027F)
- Market Data (As of 2026-01-16): Current Price KRW 289,000 (Upside Potential 55.7%), Market Cap KRW 23.29 Trillion, KOSPI 4,840.74pt, Shares Outstanding 81.0 Million, Foreign Ownership 23.8%
- Key Financial Forecasts (2025F → 2026F → 2027F):
- Revenue: KRW 12.58 Trillion → KRW 12.65 Trillion → KRW 15.76 Trillion
- Operating Profit: KRW -1.71 Trillion (Loss Continued) → KRW -285.0 Billion (Loss Narrowed, revised down to KRW -284.8 Billion reflecting EV softness) → KRW 1.66 Trillion (Turnaround)
- Net Profit (Controlling): KRW -437.0 Billion → KRW 129.0 Billion (Turnaround) → KRW 3.77 Trillion (2027F net profit includes associate disposal gains from assuming a KRW 3.5 Trillion partial SDC stake sale)
- EPS: KRW -5,591 → KRW 1,565 (Turnaround) → KRW 45,874
- Operating Margin (OPM): -13.6% → -2.3% → 10.5%
- ROE: -2.1% → 0.6% → 15.8%
- PER / PBR: -x / 1.0x → 184.7x / 1.1x → 6.3x / 0.9x
🚀 2. [Market Opportunities & Business Outlook]
- Implications of a Hypothetical SDC Stake Monetization:
- Liquidity Scale: SDC book value stood at KRW 64.0 Trillion as of end-2024; based on Samsung SDI’s 15.2% equity stake, potential cash proceeds from a full divestment are estimated at ~KRW 10.0 Trillion.
- Balance Sheet Transformation: Against projected net debt of ~KRW 11.0 Trillion at end-2026, a full stake monetization would fundamentally strengthen the balance sheet and establish financial superiority over global peers.
- 4Q25 Preview (Losses in Line with Market Expectations):
- 4Q25 Projections: Projected Revenue of KRW 3.2 Trillion (QoQ +4%) and Operating Loss of KRW -282.9 Billion (Loss continued QoQ), meeting market expectations.
- Divisional Trends: North American NCA ESS and favorable electronic materials conditions partially buffer European and North American EV softness. Passing the operational trough in 1Q26, margins are forecast to improve sequentially in 2H26 driven by North American LFP ESS line operations and raw material-ASP spread improvements.
- North American ESS Acceleration Just Beginning:
- Order backlogs are expanding following last year’s North American EV-to-ESS line conversion announcement.
- Prismatic form-factor adaptability provides a competitive delivery advantage, enabling shipments over 6 months ahead of domestic peers (potentially by early 2027) upon securing major North American client orders.
📝 Editor’s Comment (Perspective)
The analyst views Samsung SDI as a battery manufacturer poised to exit deep valuation discounts, supported by a stand-alone ESS enterprise value of KRW 29.0 Trillion and potential cash proceeds (~KRW 10 Trillion) under a hypothetical Samsung Display (SDC) stake monetization, even after conservatively writing down the EV business value to zero. This perspective emphasizes early commercial delivery advantages in prismatic ESS formats (delivering 6+ months ahead of peers) and potential balance-sheet transformation via non-core asset monetization, rather than near-term EV demand weakness or 1Q cyclical lows.
To evaluate the ongoing validity of this investment thesis, key monitoring factors include new prismatic ESS order wins from major North American customers, the commercial ramp-up of North American LFP ESS lines in 2H26 driving sequential profitability, and tangible progress regarding SDC stake monetization strategies previously highlighted during the 2025 rights offering. These operational milestones can be verified through upcoming quarterly earnings announcements, official company IR updates, and statutory regulatory filings.
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