Brokerage : Mirae Asset Securities
Analyst : Chul-joong Kim, Min-hui Kang
Investment Rating : BUY (Maintained)
Target Price : KRW 600,000 (Raised)
Core Momentum : Passing an earnings trough in 1Q26 alongside newly commenced Tesla ESS supply, while removing valuation discounts relative to top global peers backed by SDC stake monetization.
📊 1. [Valuation & Key Financial Metrics]
- Investment Rating & Target Price: BUY (Maintained), Target Price KRW 600,000 (Raised from KRW 500,000, Sector Top Pick)
- SOTP Valuation Breakdown: Small Batteries KRW 5 Trillion, EV KRW 10 Trillion, ESS KRW 31 Trillion, Electronic Materials KRW 3 Trillion, SDC Stake Value KRW 10 Trillion (Target EV/EBITDA multiple for non-ESS battery units raised from 10x to 15x to match global peers)
- Market Data (As of 2026-02-19): Current Price KRW 408,000 (Upside Potential 47.1%), Market Cap KRW 32.88 Trillion, KOSPI 5,677.25pt, Shares Outstanding 81.0 Million, Foreign Ownership 24.2%
- Key Financial Forecasts (2025F → 2026F → 2027F):
- Revenue: KRW 13.27 Trillion → KRW 14.90 Trillion → KRW 18.23 Trillion
- Operating Profit: KRW -1.72 Trillion → KRW -193.0 Billion (Loss Narrowed, revised up from KRW -500.0 Billion) → KRW 1.33 Trillion (Turnaround)
- Net Profit (Controlling): KRW -647.0 Billion → KRW 214.0 Billion (Turnaround) → KRW 1.72 Trillion
- EPS: KRW -8,279 → KRW 2,603 (Turnaround) → KRW 20,946
- Operating Margin (OPM): -13.0% → -1.3% → 7.3%
- ROE: -3.1% → 1.0% → 7.6%
- PER / PBR: -x / 1.0x → 156.7x / 1.5x → 19.5x / 1.4x
- Upward Revision Drivers: Increased probability of EV client compensation following large OEM provisions (~KRW 300.0 Billion conservatively reflected in 4Q26).
🚀 2. [Market Opportunities & Business Outlook]
- Earnings Trough & Sequential Turnaround Drivers:
- 1Q26 Trough: Revenue and operating profit are passing their cyclical bottom in 1Q26.
- Key Operational Drivers: Continued ESS improvement, cylindrical battery demand and utilization recovery, entry into new European mass-market EV projects in 2Q26, and expanding raw material-to-ASP spreads.
- Limited Downside in North American EV: North American EV shipments have practically converged to zero since 2H25, leaving negligible room for additional estimate cuts.
- SDC Stake Monetization as a Value-Up Catalyst:
- Timeline & Acquirers: Expected to be formalized at the March AGM and proceed within the year, most likely via Samsung Electronics or SDC treasury share buybacks.
- Strategic Impact: Acts as a major turning point to strengthen financial health, accelerate line conversions and medium-term contract intake, and expand next-generation CapEx.
- Tesla ESS Business Expansion: Commencing prismatic ESS battery business with global leader Tesla provides strong validation for operational re-rating.
📝 Editor’s Comment (Perspective)
The analyst views Samsung SDI as a core value-up battery player passing its cyclical earnings trough in 1Q26, initiating an operational turnaround via European mass-market EV projects in 2Q and eliminating historical valuation discounts relative to global peers through the monetization of its Samsung Display (SDC) stake. This perspective places primary importance on liquidity generation from non-core asset sales to fund next-generation investments and newly commenced business with Tesla, especially as North American EV downside risks have already played out.
To track the ongoing validity of this investment thesis, key monitoring factors include the formalization and execution of the SDC stake monetization following the March AGM, commercial ramp-up of new European mass-market EV projects in 2Q26, and actual delivery progress on new Tesla prismatic ESS contracts. These operational developments can be tracked through upcoming quarterly financial releases, company IR presentations, and periodic regulatory filings.
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