Samsung SDS Seen Posting Surprise Results on Cloud and Logistics Strength; LG Energy Solution Draws Attention for H2 ESS and EV Improvement [Stocktopia]

[Financial News] Here is a roundup of major brokerage reports as of 10 a.m. on July 7.
Samsung SDS is expected to deliver a surprise second-quarter performance and move onto a path of earnings normalization, helped by strong results in its cloud and logistics businesses.
LG Energy Solution is said to have turned a profit in the second quarter, and analysts expect earnings improvement to continue in the second half, led by energy storage systems and electric vehicle batteries. Kakao is expected to meet consensus in the second quarter on steady growth in advertising and commerce, but analysts say it will need to prove a new AI-based revenue model to spark a rebound in its share price.
◆Samsung SDS (018260)― Hanwha Investment & Securities / Analyst Kim So-hye
- Target price: 250,000 won (up 19.0% from 210,000 won) | Previous close: 193,300 won
- Investment rating: Buy (maintained)
Hanwha Investment & Securities said Samsung SDS is likely to post strong second-quarter earnings that exceed market forecasts, supported by simultaneous growth in its cloud and logistics businesses.
Kim So-hye, an analyst at Hanwha Investment & Securities, said, "We estimate second-quarter revenue at 3.69 trillion won and operating profit at 246.7 billion won, which would exceed market expectations by 6% and 9%, respectively." She added, "Cloud and logistics revenue growth appears to have been stronger than previously expected."
She added, "As delayed projects resume and external expansion in the managed service provider business accelerates, cloud revenue is estimated to have risen 15.5%."
Kim said, "Earnings normalization will become visible starting in the second quarter," and added that the previously sluggish growth in cloud revenue is expected to recover to around 20%, led by the MSP and cloud service provider businesses. She also gave a positive assessment of the outlook for the second half and the company's AI data center investment plans.※Managed Service Provider (MSP)A specialized company that provides comprehensive managed services, including consulting, cloud infrastructure setup, operations and maintenance, for businesses seeking to adopt cloud services.※AI Data Center (AIDC)A next-generation data center built on high-power, high-cooling infrastructure, designed to operate and manage large-scale ultra-fast computing equipment such as graphics processing units essential for high-performance AI computing.
◆LG Energy Solution (373220)― Shinhan Investment & Securities / Analyst Lee Jin-myeong
- Target price: 550,000 won (down 8.3% from 600,000 won) | Previous close: 354,500 won
- Investment rating: Buy (maintained)
Shinhan Investment & Securities said LG Energy Solution is likely to have swung to a profit in the second quarter and continue growing in the second half, led by energy storage systems and electric vehicle batteries. However, it lowered its target price to reflect revisions to earnings estimates.
Lee Jin-myeong, an analyst at Shinhan Investment & Securities, said, "We are entering a phase in which ESS orders and earnings growth will accelerate in the second half." He added, "Second-quarter revenue is estimated at 7.7362 trillion won, up 18.0% from the previous quarter, while operating profit is expected to reach 246 billion won, marking a return to profit and beating market expectations."
He said the solid trend should continue in the second half. "Profitability will remain somewhat weak through the second quarter due to line conversion costs, but a full turnaround is expected as utilization rises and production tax credits expand," he explained.
He added, "Additional proof is needed for a full rebound and re-rating in the stock price," and said, "We need to see normalization in ESS profitability and a reduction in losses in the automotive battery segment."
◆Kakao (035720)― DB Securities / Analyst Shin Eun-jung
- Target price: 57,000 won (down 17.4% from 69,000 won) | Previous close: 35,600 won
- Investment rating: Buy (maintained)
DB Securities said Kakao's second-quarter results are likely to meet market expectations on growth in advertising and commerce, but it lowered its target price, citing the lack of a clear AI revenue model going forward.
Shin Eun-jung, an analyst at DB Securities, said, "Kakao's operating profit in the second quarter is expected to rise 17.4% from a year earlier to 218.4 billion won." She added, "Advertising revenue continued to grow by more than 20%, driven by business messaging, and commerce also maintained growth, led by the gifting feature."
However, she said the content business is likely to be mixed. Music should remain solid, led by SM Entertainment, but growth in stories and media is expected to be somewhat weak.
She also said that among the external partners Kakao plans to unveil to activate 'kanana in talk' in the second half, "GPT in kakao" is estimated to have accumulated about 11 million users. However, traffic indicators and external partner connections have yet to gain traction, so Kakao urgently needs to secure an AI breakthrough through kanana in talk in the short term. "The valuation is at the historical bottom range, but if there is any AI-related news, the stock can move higher at any time," she said.※kanana in talkA new AI conversational service Kakao is preparing to activate in the second half, designed as a new AI platform that seeks organic payment and service expansion through connections with external partners.

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