Kyobo Securities on Tuesday raised its target price for Samsung SDI to 880,000 won and maintained a “buy” rating, citing first-quarter results that beat market expectations by a wide margin.
Choi Bo-young, a researcher at Kyobo Securities, said Samsung SDI posted consolidated first-quarter revenue of 3.5764 trillion won, up 12.6% from a year earlier. The company reported an operating loss of 155.6 billion won, a sharp improvement from the consensus estimate of an operating loss of 280.9 billion won, Choi said.
Kyobo attributed the surprise to expanding battery demand tied to artificial intelligence data centers, improved performance in the energy storage system, or ESS, business, and the reflection of customer compensation payments.
Choi said losses narrowed more than expected as demand strengthened for battery backup units, or BBUs, for AI data centers and for high-output cylindrical batteries used in power tools in the small-battery division. He added that in the ESS division, increased shipments of high value-added uninterruptible power supply, or UPS, products for data centers supported results, and compensation related to volumes from a North American customer also helped profitability.
On the UPS segment, Choi said the market remains limited in size but growth visibility is improving quickly, with proactive steps underway such as converting a UPS line at the Ulsan plant. He forecast that because global competitors are limited in the high-output small BBU segment, Samsung SDI’s market share could expand faster than overall market growth.
* This article has been translated by AI.
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