Samsung SDI Re-rated as a Power Infrastructure Company; Target Price Raised to 800,000 Won

[Financial News] iM Securities raised its target price for Samsung SDI from 590,000 won to 800,000 won, saying the company's earnings improvement is gaining momentum, led by energy storage systems (ESS).
The investment rating was maintained at 'Buy.' Samsung SDI's previous-day closing price was 542,000 won, indicating 47.9% upside to iM Securities' target price of 800,000 won.
On the 21st, Jung Won-seok, an analyst at iM Securities, forecast that Samsung SDI's third-quarter results would significantly exceed market expectations, driven by one-off gains and increased ESS sales.
Samsung SDI's third-quarter revenue is projected to rise 33% year on year to 4.1 trillion won, while operating profit is expected to reach 285 billion won. These figures are above the market consensus of 4 trillion won in revenue and 115.9 billion won in operating profit.
Jung Won-seok said, "After receiving a refund on reciprocal tariffs in the second quarter, Samsung SDI is expected to record compensation payments in the third quarter from automakers that failed to meet minimum purchase volumes. These one-off gains will drive the improvement in earnings."
ESS is the key business segment. Third-quarter ESS sales are expected to increase by approximately 32% from the previous quarter. The increase is projected to be even larger in the fourth quarter, when the lithium iron phosphate (LFP) production line in the United States begins full-scale operations.
Revenue from cylindrical batteries is also expected to rise 6%, driven by growing demand for power tools and battery backup units (BBUs) for AI Data Centers (AIDC), with operating profit turning positive. Automotive battery revenue, however, is projected to decline 3% due to inventory adjustments by a major customer.
The conversion of SDI-GM Synergy Cells to sole ownership is a key variable in expanding the North American ESS business. Jung said, "Samsung SDI plans to secure approximately 35 GWh of ESS production capacity by the end of 2027, and a significant portion of that capacity has already been booked through 2029 based on existing orders."
The analysis indicates that the ESS production lines at the new plant could be expanded in stages beginning in the second half of 2028, taking customer certification and other factors into account.
iM Securities forecasts Samsung SDI's operating profit to increase from 570 billion won in 2026 to 2.384 trillion won in 2028. The firm believes that growth in the ESS market in the United States, increased investment in AIDC, and tighter supply chain regulations involving China are creating a favorable environment for South Korean battery makers.
Accordingly, iM Securities said Samsung SDI should be revalued beyond its existing image as an electric vehicle battery maker and recognized as a power infrastructure company that supplies stable electricity to AI data centers and other facilities.

[email protected] Kang Jung-mo Reporter