[COX] Samsung SDI Posts Losses for 5 Consecutive Quarters… ESS Emerges…

SAMSUNG SDI'S ESS / PHOTO BY SAMSUNG SDI

Market views on Samsung SDI remain divided. While optimism and caution coexist, there is one common denominator: ESS is seen as the key to escaping losses.

IBK Investment & Securities projected Samsung SDI’s first-quarter revenue at KRW 3.584 trillion and an operating loss of KRW 212 billion, a better figure than the market consensus loss of KRW 275 billion. This outlook is attributed to improved electric vehicle mix in Europe, strong shipments to BMW and Volkswagen, solid ESS shipments in North America, and normalization of small battery inventories. Starting in the second quarter, P6 high-nickel products are expected to be adopted in Hyundai and Kia’s European volume models, leading to a full-scale recovery in mid- to large-sized battery performance. The target price was raised to KRW 500,000.

NH Investment & Securities shared a similar view. It estimated a first-quarter operating loss of KRW 275.6 billion, defining it as the bottom for the year. The firm expects performance to improve each quarter thereafter, with a potential return to profitability in the second half. It projected a full-year 2026 operating loss of KRW 328 billion, better than the market consensus loss of KRW 501 billion. The target price was raised to KRW 490,000.

KB Securities went a step further. Reflecting growing ESS demand driven by artificial intelligence (AI), it raised its average operating margin forecast for 2026–2030 from 4.1% to 6.0%, and set a target price of KRW 530,000 compared to the current level of around KRW 440,000. Although the first-quarter operating loss of KRW 281.6 billion meets consensus expectations, it emphasized that strong ESS momentum will drive performance recovery.

On the other hand, Korea Investment & Securities urged a more cautious approach. While acknowledging the positive impact of expanding ESS production capacity, it delayed the timing of meaningful profit contribution to after 2027, suggesting that losses may persist through 2026.

Hana Securities positioned itself in between. It expects quarterly losses, which reached KRW 600 billion in the first half of 2025, to narrow to around KRW 200 billion in the second half of 2026, with a high possibility of returning to profitability in the fourth quarter.

Both opportunities and risks coexist. The draft of the European Industrial Acceleration Act (IAA), which appears more favorable to Korea than China, is a positive factor. However, uncertainties surrounding U.S. tariffs and delayed recovery in electric vehicle demand remain constraints.

ESS shipments to North America are reportedly fully booked through 2028. The point at which production ramp-up enters full swing will mark the turning point for performance recovery. This explains why the securities industry is focusing on ESS.

Samsung SDI’s five consecutive quarterly losses are beginning to show an end in sight. The question is whether that end will come this year or next.