On Thursday, CLSA maintained its Hold rating on Samsung (KS:005930) SDI Co Ltd (006400:KS) stock with a consistent price target of KRW360,000.00. The firm's analysis followed Samsung SDI's third-quarter results, which aligned with expectations after accounting for the discontinued polariser film business. The electric vehicle (EV) battery segment, referred to as XEV, met forecasts, while the energy storage solutions (ESS) division performed better than anticipated. However, the small-cell business did not meet expectations.
Samsung SDI's XEV business is projected to see a slight uptick in revenue heading into the fourth quarter of 2024, though profitability improvements are not anticipated to be significant. The ESS division's growth and profitability are noted as promising, but given that it represents only 5%-8% of the total business, its impact on overall performance is limited.
The company's future performance, particularly in the XEV market, is under scrutiny. The outlook in Europe is concerning, which could affect revenue in the coming year. Conversely, the United States presents a more positive scenario, although the impending US elections pose a potential risk to the market.
CLSA's outlook for Samsung SDI remains cautious, with the expectation that the stock will likely stay range-bound for some time. The firm's reiterated Hold rating and price target reflect a watchful stance on the company's near-term prospects.
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