KOSPIBatteries006400

Samsung SDI

₩528,000▲ 2.13%2026-10-02 close

Market Cap

₩42.6T

Turnover

₩122.6B

Volume

230,000 shares

Shares out.

80.6M

PER

898.4×

PBR

1.8×

EPS

₩610

Dividend Yield

0.00%

PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Dividend yield is based on ₩0 per share · Prices as of the 2026-10-02 close

Report overview

ESS Restores Profit; Durability Is the H2 Test

A year after its first trillion-won annual operating loss, Samsung SDI returned to a quarterly operating profit of KRW 203.8bn in 2Q26, and the question now is whether AI-datacenter-driven ESS demand can sustain it.

1
2Q26 revenue was KRW 3,768.8bn with operating profit of KRW 203.8bn, flipping the quarterly line back to black. The company said it was the first profit in seven quarters since 3Q24.
2
In 2025 revenue was KRW 13,266.7bn with an operating loss of KRW 1,722.4bn, a steep fall from 2023 revenue of KRW 22,708.3bn and the largest loss on record.
3
The growth axis is shifting from EV to ESS and high-power small cells. Management guided to October mass production of US ESS LFP cells and a sharp H2 revenue increase.
4
In August 2026 it agreed to end the GM joint venture and convert Indiana-based Synergy Cells into a wholly owned entity, while separately signing a joint development agreement for next-generation prismatic cells.
5
It monetized part of its Samsung Display stake for KRW 4,450bn to fund investment, though the specific investment plan after the solo-entity conversion has not yet been finalized.

Business structure

Samsung SDI runs two segments, batteries and electronic materials, with batteries accounting for the bulk of revenue. The company reported 2Q26 battery revenue of KRW 3,519.0bn, up 18.8% year on year, with the segment swinging to an operating profit of KRW 159.3bn, while electronic materials makes up the remainder.

The battery business spans mid-to-large prismatic and cylindrical cells for EVs, high-power small cells for uninterruptible power supplies (UPS), battery backup units (BBU) and power tools, and ESS.

Its customer base is concentrated in premium automakers: in April 2026 it said a prismatic-based supply contract with Mercedes-Benz completed its lineup of all three German premium brands alongside BMW and Audi.

European output centers on Goed, Hungary, where four existing lines at plant 1 are being converted into prismatic lines for Volkswagen using a side-terminal design tailored to customer requirements.

In North America the anchor is StarPlus Energy, the Stellantis joint venture, and an August 2026 board resolution set out the purchase of GM's 49.99% stake to make Synergy Cells a wholly owned subsidiary.

In small cells, datacenters and robotics are new demand pools: the company disclosed that it has won orders from six top-tier humanoid makers across the US, Korea and China and is supplying or discussing mass production of high-energy-density 2170 cylindrical cells.

Electronic materials is led by semiconductor packaging and display materials, and in 1Q26 solid semiconductor materials sales plus a rebound in display materials on a key customer's flagship smartphone lifted segment revenue 13% and operating profit 15% year on year.

Competitively, unlike domestic peers focused on pouch cells, the company points to being the only prismatic battery producer in Korea.

Earnings trend

Quarterly revenue · Operating profit

₩3.2T-₩397.8B25Q2₩3.1T-₩591.3B25Q3₩3.9T-₩299.2B25Q4₩3.6T-₩155.6B26Q1₩3.8T₩203.8B26Q2

RevenueOperating profit

Annual revenue · Operating profit

₩20.1T₩1.8T2022₩22.7T₩1.6T2023₩16.6T₩363.3B2024₩13.3T-₩1.7T2025

RevenueOperating profit

Quarterly results · Last 5 quarters
Quarter	Revenue	Operating profit	Op. margin
2025Q2	₩3.2T	-₩397.8B	−12.5%
2025Q3	₩3.1T	-₩591.3B	−19.4%
2025Q4	₩3.9T	-₩299.2B	−7.8%
2026Q1	₩3.6T	-₩155.6B	−4.4%
2026Q2	₩3.8T	₩203.8B	5.4%

Annual results
Year	Revenue	Operating profit	Net income (parent)	Op. margin	ROE	Debt-to-equity
2022	₩20.1T	₩1.8T	₩2T	9.0%	11.8%	75.7%
2023	₩22.7T	₩1.6T	₩2T	7.2%	10.9%	71.0%
2024	₩16.6T	₩363.3B	₩599.3B	2.2%	3.0%	88.2%
2025	₩13.3T	-₩1.7T	-₩649.5B	−13.0%	−3.0%	79.3%

Consolidated basis (financial statements including subsidiaries) · Final figures from DART filings · Net income attributable to owners of the parent · Data as of 2026-09-04

Earnings analysis

The annual path is one of a sharp decline followed by an attempt to pass the trough. Revenue fell for two straight years, from KRW 20,124.1bn in 2022 and KRW 22,708.3bn in 2023 to KRW 16,592.2bn in 2024 and KRW 13,266.7bn in 2025.

The operating margin slid from 9.0% in 2022 and 7.2% in 2023 to 2.2% in 2024, then turned to an operating loss of KRW 1,722.4bn and a margin of -13.0% in 2025. Net profit attributable to owners also swung from a KRW 2,009.2bn profit in 2023 to a KRW 649.5bn loss in 2025.

On the other hand, operating cash flow was a KRW 792.4bn inflow in 2025 versus a KRW 137.6bn outflow in 2024, and the debt-to-equity ratio eased from 88.2% in 2024 to 79.3% in 2025.

Quarterly, the operating loss peaked at KRW 591.3bn in 3Q25, narrowed to KRW 299.2bn in 4Q25 and KRW 155.6bn in 1Q26, then turned to a KRW 203.8bn profit in 2Q26.

The company described this as its first profit in seven quarters since 3Q24 and, with KRW 48.2bn of first-half cumulative operating profit, an early delivery of its promised turnaround.

The quality of that swing deserves scrutiny: press reporting noted that the second-quarter profit was helped by US tariff refunds and favorable exchange rates alongside solid battery sales.

Revenue rose from KRW 3,179.4bn in 2Q25 to KRW 3,768.8bn in 2Q26, yet summing the four quarters from 3Q25 through 2Q26 still leaves operating income in the red and owners' net income near breakeven, indicating the recovery is at an early stage.

Industry analysis

End demand has split, with EVs and ESS heading in opposite directions. The company and industry watchers put 2026 global EV battery market growth at around 6%, while expecting expanding AI datacenter investment and US local-production opportunities for non-Chinese players to support ESS and small cells.

ESS figures are far more aggressive. Management projected datacenter ESS demand to grow from 9GWh in 2025 to more than 40GWh by 2030, a CAGR above 30%, with on-site microgrid ESS inside datacenters growing at over 60% a year through 2030.

Citing SNE Research, US ESS demand is seen more than doubling from 59GWh in 2025 to 142GWh in 2030, with rising preference for LFP chemistry and prismatic form factors on cost and safety grounds.

In cycle terms the industry is unbalanced, combining weak EVs with an ESS boom, and market sentiment has diverged between EV-linked names and companies exposed to energy storage and AI datacenters.

On competition, LG Energy Solution converted its Holland, Michigan plant into a dedicated LFP base and signed a large ESS LFP supply deal with Tesla, becoming the first of the three Korean makers to run US LFP volume production, while SK On also secured an LFP supply contract with a US developer, making Samsung SDI a relative latecomer in LFP.

Domestically, however, Samsung SDI held the largest share at about 56% across the first and second ESS central contract market rounds.

Analysts argue that the ability to supply domestically produced LFP cells will likely decide competitiveness in the third round, and the three Korean makers are racing to convert LFP lines.

Outlook

Management's stated H2 direction is ESS-led revenue expansion with sustained profitability.

On the second-quarter call, EVP Oh Jae-kyun said H2 revenue would rise sharply on US grid-scale ESS and UPS demand, with profitability staying healthy thanks to new LFP line operations and the Advanced Manufacturing Production Credit (AMPC). Production timing has also been specified.

US ESS LFP cells are set to enter mass production in October with customer shipments starting within the year, and management said quality validation of the US prismatic LFP line was under way.

On orders, EVP Cho Yong-hwi said US ESS orders secured so far cover a substantial portion of capacity through 2029, that including projects likely to be won in H2 demand would exceed capacity from 2028, and that additional capacity options are under internal review.

In small cells, EVP Cho Han-je projected UPS and BBU battery revenue each to grow more than 70% year on year in 2026 and put the company's share of those markets at roughly 40-50%.

On next-generation technology, the company said all-solid-state batteries remain on track for mass production in the second half of 2027, that the first commercialization project is likely to be humanoids, and that humanoid samples would be supplied during H2.

On utilization, the first-quarter briefing indicated Hungary plant utilization improving to above 70% in H2, versus a reported 40%-range rate for the Hungarian prismatic lines in 4Q25.

On funding, the board approved transferring 13,088,235 Samsung Display common shares at KRW 340,000 each for a total of KRW 4,450bn, with a scheduled transfer date of August 27, while the company said existing investment plans will change following the Synergy Cells solo-entity conversion but that specifics are not yet fixed and will be disclosed when confirmed.

Valuation

PER

898.4×

PBR

1.8×

ROE

0.2%

EPS

₩610

BPS

₩308,793

Dividend per share

₩0

With the earnings base still thin, profit-based multiples offer limited insight. Owners' net income summed over the four quarters from 3Q25 through 2Q26 sits near breakeven, so the price-to-earnings multiple computes to an unusually large figure that does not support conventional comparison.

On the capital side, owners' equity of KRW 21,442.9bn at end-2025 provides a steadier reference, yet the shares trade at a premium to net assets and the multiple can differ depending on the calculation basis used by the exchange versus in-house methods.

On earnings scale, today's base is far below the years when the operating margin reached 9% in 2022 and the 7% range in 2023; the first half of 2026 marks only a directional shift from loss to profit. No cash dividend is confirmed for the most recent fiscal year, so dividend-based comparison does not apply.

Brokerage views diverge: DB Financial Investment said in a July 31, 2026 report that it maintained a Buy rating while cutting its target price from KRW 840,000 to KRW 680,000.

Analyst Chung Kyung-hee at LS Securities was reported to have lowered the target price from KRW 618,000 to KRW 593,000 on May 12, 2026 while maintaining a Hold rating.

PER, EPS, PBR and BPS are all calculated in-house (the same method as Naver and Toss) · Dividend yield = cash dividend per share from DART filings (supplemented by KRX) ÷ current price · As of 2026-09-04

Bull factors

AI datacenters create ESS demand and order visibility

The company said its prismatic competitiveness and local production capability secured long-term supply contracts with major US ESS customers, plus order wins in a Korean next-generation distribution-grid ESS project.

Its statement that secured US ESS orders cover much of capacity through 2029 and that demand should exceed capacity from 2028 matters for medium-term revenue visibility. The projection that datacenter ESS demand grows from 9GWh in 2025 to more than 40GWh by 2030 is cited as evidence of end-market expansion. The setup is one where new demand pools fill the gap left by slowing EV demand.

Better mix plus utilization and tax-credit leverage

The KRW 203.8bn operating profit in 2Q26 marks a sharp structural change from the KRW 591.3bn loss in 3Q25. Reporting attributed the revenue lift across the portfolio to higher sales of high-power products such as UPS batteries, battery backup units and power-tool cells, plus strong European EV battery demand.

The company cited larger Advanced Manufacturing Production Credit receipts from rising US-made ESS sales and expanded high-value cylindrical cell sales as drivers of the improvement. The comment that Hungary plant utilization should improve above 70% in H2 also points to room for easing fixed-cost burdens.

Financial flexibility and control of North American output

It monetized part of its Samsung Display stake at KRW 340,000 per share for KRW 4,450bn in total, securing funds for North American battery investment and the ESS shift. That coincides with 2025 operating cash flow turning to a KRW 792.4bn inflow and the debt-to-equity ratio easing from 88.2% in 2024 to 79.3% in 2025.

Buying out GM's stake gives it full ownership of the plant under construction, and the company said it plans to allocate part of the lines to ESS battery output. Sole operation is read as widening its options in allocating customers and products.

Bear factors

Profit durability is still unproven

Summed across the four quarters from 3Q25 to 2Q26, operating income remains negative, and the profit is confined to 2Q26 alone. Reporting noted that US tariff refunds and favorable exchange rates contributed to the second-quarter profit, so the operational improvement must be separated from one-off items.

One assessment was that the market appears to want more evidence of a sustainable recovery. Whether the profit trend continues from the third quarter is the pivotal question.

Slowing EV demand and European share pressure

Revenue falling from KRW 22,708.3bn in 2023 to KRW 13,266.7bn in 2025 reflects the EV slowdown. Weak EV demand, delayed customer projects and inventory adjustment were identified as the combined causes of the large 2025 loss.

In a May 2026 report, LS Securities pointed to declining European market share, initial ramp costs and low utilization. The expectation that the global EV battery market grows only around 6% in 2026 also caps the pace of core-business recovery.

ESS concentration and intensifying competition

LS Securities was reported to have judged that rising ESS battery volumes alone are insufficient to offset EV battery weakness. In LFP-based ESS, LG Energy Solution moved first among the three Korean makers to establish US volume production and signed a large supply deal with Tesla, so a front-runner already exists.

Observers also note that competition over long-term US supply contracts is set to intensify. The larger the ESS weighting, the greater the exposure to a single end-demand pool and its policy environment.

Risk factors

Policy and tax-credit dependence

The company cited both new LFP line operations and the Advanced Manufacturing Production Credit as grounds for second-half profitability. DB Financial Investment was reported to have assumed KRW 108.7bn of the credit in its third-quarter operating profit estimate in a July 2026 report.

Because the credit scales with US local output and depends on the scheme remaining in place, policy change can hit earnings directly. The contribution of US tariff refunds to the second-quarter profit likewise shows the weight of policy-linked items.

Large capital expenditure execution

Synergy Cells is a 27GWh-per-year entity established in New Carlisle, Indiana in 2024 with a combined USD 3.5bn investment, and construction is still under way. Existing investment plans will be revised after the solo-entity conversion, but specifics remain unfixed.

Press commentary flagged how much of the KRW 4,450bn actually goes into Synergy Cells and the ESS conversion, whether new automaker customers are won, and product-level utilization at the 27GWh plant as the variables that will decide investment outcomes. Investment now borne alone, and its depreciation schedule, will shape the future margin path.

Customer and project concentration

North American output relies heavily on a single base, given that production runs through the StarPlus Energy plant in Indiana, with some lines converted from EV to ESS NCA cells since 4Q25 and ESS LFP equipment to be added in 4Q26.

GM's stake sale is widely read as an extension of its retreat from direct EV battery investment toward long-term purchase and sourcing contracts, and foreign media described it as a further retreat from electric cars.

Any change in an automaker customer's electrification plan feeds straight into utilization and volume plans. Reporting that the 46-phi line at Goed plant 2 will enter actual mass production around October 2027 after BMW reliability testing also implies schedule risk.

What to watch next

October 2026
Whether US ESS LFP mass production starts in October with customer shipments within the year. The ramp pace will determine how much H2 ESS revenue and utilization actually improve.
Late October 2026
Third-quarter results and the earnings call. Key items are whether the KRW 203.8bn operating profit of 2Q26 proves repeatable, alongside the size of Advanced Manufacturing Production Credit receipts and segment margins.
4Q 2026
The outcome of the internal review of additional capacity and whether the specific investment plan following the Synergy Cells solo-entity conversion is disclosed. Scale and timing will drive future depreciation burdens.
4Q 2026 to 1H 2027
Results of Korea's third ESS central contract market round. The checks are whether the company sustains its roughly 56% cumulative share from rounds one and two and whether domestically produced LFP supply capability converts into actual orders.
2H 2026 through 2H 2027
Progress on all-solid-state battery samples for humanoids and the 2H 2027 mass-production target. The first commercialization target and customer validation results will shape confidence in the next-generation roadmap.

Overall view

Samsung SDI's last four years trace a path from near double-digit operating margins in 2022-2023 to a KRW 1,722.4bn operating loss and a -13.0% margin in 2025, before the direction reversed in the first half of 2026.

Second-quarter 2026 revenue of KRW 3,768.8bn and operating profit of KRW 203.8bn came in a quarter the company described as its first profit in seven quarters and an early delivery of its turnaround target, yet operating income summed across 3Q25 to 2Q26 remains negative.

The bullish case rests on AI-datacenter-driven ESS, UPS and BBU demand, US ESS orders said to cover much of capacity through 2029, and the KRW 4,450bn of investment funds raised by monetizing the Samsung Display stake.

The bearish case rests on the composition of a profit swing helped by tariff refunds and exchange rates, the delayed recovery in the core EV business, and an investment structure in which it now bears the 27GWh Indiana plant under construction alone.

On valuation, the earnings base is still thin enough to make conventional profit-multiple comparison difficult, and the shares trade at a premium to net assets. Brokerage views also diverge, as seen in DB Financial Investment's July 2026 target price cut and LS Securities' maintained Hold rating.

Ultimately, second-half 2026 results, the LFP ramp and any disclosure on additional capacity will be the factual basis for defining the nature of this recovery.

Sources

Korea Exchange (KRX) — Prices · Market Cap · Volume
FSS electronic disclosure system (DART) — Financial statements · Dividend filings

Show 18 more articles and sources

Report written 2026-09-05 · Data as of 2026-09-04

This content is AI analysis of market data and web search results, provided for information only. It is not a solicitation or recommendation to invest. Investment decisions and their consequences are the investor's own responsibility. Data may be delayed or contain errors.