Samsung SDI is projected to return to profitability in Q2 with an operating profit of 31.2 billion won, according to Shinhan Securities on July 22. This would mark the company's first quarterly profit in seven quarters, ending a streak that began in Q3 2024. The turnaround is attributed to approximately 97.7 billion won in Advanced Manufacturing Production Credits (AMPC) from US battery production and around 100 billion won in US reciprocal tariff refunds. Shinhan Securities analyst Park Jin-soo maintained a 'buy' rating and 830,000 won target price, citing Samsung SDI's attractive valuation given its clear profit growth path driven by US-bound ESS battery demand. The Q2 revenue forecast of 3.6 trillion won represents a 1% increase from the previous quarter, significantly exceeding the market consensus of a 44.9 billion won operating loss compiled by FnGuide.
Shinhan Securities Projects Samsung SDI Stocks Q2 Operating Profit at 31.2 Billion Won
Shinhan Securities estimated Samsung SDI's Q2 revenue at 3.6 trillion won, up 1% from the previous quarter, with operating profit of 31.2 billion won. This forecast contrasts sharply with the firm's earlier market consensus estimate of a 44.9 billion won operating loss for Q2. According to FnGuide, the market's average Q2 operating profit forecast for Samsung SDI stands at a 39.6 billion won loss, with projections ranging from a high of 95 billion won profit to a low of 126.4 billion won loss. Park Jin-soo stated that Q2 results will confirm there are no issues with the company's growth and recovery trajectory.
AMPC Credits and Tariff Refunds Drive Profitability Recovery
Samsung SDI's Q2 AMPC from US battery production is expected to reach 97.7 billion won, a 21% increase from the previous quarter. An additional approximately 100 billion won in US reciprocal tariff refunds is reflected in the Q2 forecast, contributing to the profitability recovery. Energy Storage System (ESS) battery revenue is projected to grow 5% quarter-over-quarter, lower than the initially expected 10% increase due to delayed delivery schedules for some domestic projects. However, increased sales of high-margin Uninterruptible Power Supply (UPS) products and tariff refunds are estimated to have defended profitability. Sales of NCA (nickel-cobalt-aluminum) ESS batteries in the US market continue to grow steadily.
Starplus LFP ESS Line to Begin Operations in Q4
A 22GWh Starplus lithium iron phosphate (LFP) ESS line is scheduled to start new operations in Q4. Shinhan Securities projects that full-scale shipments of Samsung Battery Box (SBB) 2.0 LFP products will drive ESS division revenue to approximately 7 trillion won in 2027, a 61% increase from 2025 levels. Based on the expansion of high-profitability product lines, Samsung SDI's 2027 consolidated operating profit is estimated to rise sharply to 1.3 trillion won from the 83.3 billion won expected for 2025. Park Jin-soo noted that the mid- to long-term growth potential of the ESS division is a key point to watch.
Small Battery Sales Increase 10% on BBU and Power Tool Demand
The small battery division is expected to see revenue increase 10% from the previous quarter due to rising demand for Battery Backup Units (BBU) and power tool products, successfully reducing the operating loss. The improved sales performance in this segment contributed to narrowing overall losses ahead of the Q2 profitability turnaround.
EV Battery Revenue Declines 10% on BMW Delivery Delays
The electric vehicle battery division showed a somewhat sluggish performance, with revenue declining approximately 10% from the previous quarter. The one-time compensation received from major automotive customers in Q1 has expired, and sales recovery to key customer BMW has been delayed. However, the division's operating loss narrowed due to increased production volume from US Starplus for European markets and higher AMPC credits. European automakers are actively pursuing supply chain diversification, and Samsung SDI is securing actual order volumes, which raises the possibility of future performance improvement in the EV battery division.
Hungary Plant Utilization Rate Expected to Reach 70% in H2
Park Jin-soo of Shinhan Securities projected that Samsung SDI's Hungary plant utilization rate will improve to around 70% in the second half, an increase of approximately 20 percentage points from last year, benefiting from line conversion effects. He noted that pure electric vehicle registrations in major European countries including Germany, France, and the UK increased 44% year-over-year in the first half, with strong sales continuing. The improved utilization rate is expected to support the EV battery division's recovery trajectory.
FAQ
What is Samsung SDI's projected Q2 operating profit according to Shinhan Securities?
Shinhan Securities forecasts Samsung SDI's Q2 operating profit at 31.2 billion won, which would be the company's first quarterly profit in seven quarters since Q3 2024. The projection is based on approximately 97.7 billion won in AMPC credits from US battery production and around 100 billion won in US reciprocal tariff refunds.
Why did Samsung SDI's EV battery revenue decline in Q2?
Samsung SDI's EV battery revenue is estimated to have declined approximately 10% from the previous quarter due to the expiration of one-time compensation received from major automotive customers in Q1 and delayed sales recovery to key customer BMW. However, the division's operating loss narrowed due to increased production from US Starplus for European markets and higher AMPC credits.
When will Samsung SDI's Starplus LFP ESS line begin operations?
Samsung SDI's 22GWh Starplus lithium iron phosphate (LFP) ESS line is scheduled to start new operations in Q4. Shinhan Securities projects that full-scale shipments of Samsung Battery Box (SBB) 2.0 LFP products will drive ESS division revenue to approximately 7 trillion won in 2027, a 61% increase from 2025 levels.
