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Photo = Samsung SDI |
[Alpha Biz= Kim Sangjin] NH Investment & Securities announced on Friday that Samsung SDI’s recovery prospects in 2025 are unlikely to be significant, limiting its upside potential. As a result, the firm reduced its target price by 11%, from KRW 370,000 to KRW 330,000, while maintaining its "Buy" rating.
NH Investment projected Q4 2023 revenue at KRW 3.9 trillion, a 30% decline year-on-year, with an operating loss of KRW 201 billion, falling short of consensus estimates (KRW 4.2 trillion in revenue and KRW 128 billion in operating profit). Excluding the Advanced Manufacturing Production Credit (AMPC) of KRW 18 billion, the operating loss is expected to reach KRW 219 billion.
The brokerage explained, “We estimate weaker-than-expected demand caused poor sales across all business units, excluding Energy Storage Systems (ESS). Fixed cost burdens and one-off expenses further deteriorated profitability. These one-off costs likely stemmed from efforts to normalize inventory levels for small batteries and quality costs related to automotive batteries.”
Additionally, NH Investment noted, “In Europe, following a January meeting between the EU Commission and the automotive industry, carbon dioxide (CO2) penalty regulations are expected to be eased. While emission limits are set to tighten as scheduled, the relaxed penalties were factored into growth rate adjustments.”
AlphaBIZ Kim SangJin(letyou@alphabiz.co.kr)
