Samsung SDI is showing weakness in trading despite receiving both an upward revision of its fair value and a maintained 'BUY' investment opinion from Daol Investment & Securities.

On the 26th, Samsung SDI was trading at 511,000 won, down 8,000 won from the previous session, a decline of 1.54%. Even with the target price hike from the securities industry, selling volume emerged in the short term, leading to a stock price correction.

◆ Valuation Method Switched... Stake Value Directly Reflected via SOTP

Daol Investment & Securities raised Samsung SDI's fair value to 820,000 won, up from its previous estimate, reflecting the planned sale of its Samsung Display (SDC) stake and the effect of acquiring the joint venture (JV) with General Motors (GM) of the United States.

Notable in this evaluation is the change in valuation methodology. In light of the planned sale of the Samsung Display stake, Daol Investment & Securities applied the SOTP (Sum of the Parts) method based on 2027 estimates, instead of the previously used 2027-based price-to-earnings (P/E) ratio approach, in order to more concretely reflect the value of the held stake.

The SOTP method separately values each business and asset a company holds and then sums them to derive the total enterprise value. For Samsung SDI, this means that not only its battery business but also the value of its Samsung Display stake can be reflected more directly in the enterprise valuation.

◆ Expanding ESS Market and Sole Operation of GM JV Also Cited as Rationale

The potential expansion of the energy storage system (ESS) market was also presented as a key basis for the fair value hike. Assuming that Samsung SDI's penetration of the ESS market accelerates, Daol Investment & Securities set the EV/EBITDA multiple applied in its valuation 40% higher than Samsung SDI's recent trading multiple of 11x.

In particular, the change in business structure — with Samsung SDI moving to solely operate the U.S. battery JV it had pursued with GM — is interpreted as having influenced the evaluation, as it could broaden the scope of utilization of the production facilities. Whether the company can break free from the constraint of production facilities dedicated to a specific automaker and serve various demand sources, including ESS, is cited as a key variable for future business value.

◆ Samsung SDI Seeks to Secure 4.45 Trillion Won Through Sale of Samsung Display Stake

Earlier, Samsung SDI has been pursuing a plan to secure approximately 4.45 trillion won through the sale of its Samsung Display stake. Some in the market analyze that the secured funds could be used as investment resources for the battery business, including U.S. production facilities, reducing the burden of financing large-scale capital expenditures.

◆ Target Price Hike and Stock Movement Are Separate Matters... Key Variables Ahead

However, a target price hike and actual stock movement are separate issues. With Samsung SDI shares down more than 1% on the day, the specific terms of the Samsung Display stake sale, plans for using the funds, the direction of production facility operations following the GM JV acquisition, and the pace of ESS business expansion are expected to be key variables determining the stock's trajectory.

[Stock investing may result in losses depending on a company's performance, industry conditions, supply and demand, and market fluctuations. Target prices and investment opinions presented by securities firms are calculated based on earnings forecasts and assumptions at the time of analysis, and do not guarantee that the actual stock price will rise to those levels or that certain returns will be achieved. Before investing, it is necessary to comprehensively check the company's official disclosures, financial condition, and business progress. This article is not intended to recommend buying or selling any specific stock. This article was written with AI assistance.]