글쓴이 아카이브: Gangnam

Samsung SDI series: Part 1 · Part 2 · Part 3
🇰🇷 한국어 원문 · Originally written in Korean on Oct 13, 2026. Charts are in Korean; key figures are restated in the text.

This is my final piece on Samsung SDI.

Part 1 covered the quality of earnings, and Part 2 the turnaround stage and growth. This time it’s about price.

Bottom line first: I’ve decided not to add new shares at the current price (₩567,000, the Oct 9 close when I ran the analysis). If we get a pullback, I’ll buy in tranches between ₩530,000 and ₩550,000.

And if the stock closes above ₩597,000 after 3Q26 results, I’ll add more. Here’s why.

1. Price Targets Range From ₩400,000 To ₩1,000,000

According to FnGuide, price targets from 19 brokers range from ₩402,000 to ₩1,000,000. The average is ₩741,000, 31% above the current ₩567,000 (741 / 567 = 1.31).

What’s interesting is how much the answer changes with the same earnings forecast just by swapping the multiple:

• Battery cell peer multiple (8.2x EV/EBITDA) → ₩590,000 (iM Securities, July)
• Power equipment peer multiple (12.1x) → ₩800,000 (iM Securities, September)
• Custom multiple (15.5x) → ₩940,000 (DS Investment, October)

In the end, it comes down to whether the market sees SDI as a “battery company” or a “power infrastructure company.”

It’s the same idea as the growth debate in Part 2: whether you focus on the high growth rate or on the decelerating delta is a matter of perspective. At the battery-cell multiple, ₩590,000 is roughly today’s price (590 / 567 = +4%). Doesn’t that suggest the value as a battery company is already in the price?

For reference, versus LG Energy Solution, SDI has the better balance sheet and lower P/B, but smaller US ESS capacity:

• Debt/equity: SDI 77% vs. LGES 157%
• P/B: SDI 1.9x vs. LGES 4.2x
• US ESS capacity: SDI 30GWh vs. LGES 50GWh+

One more balance sheet point. Free cash flow has been negative for ten straight quarters, about ₩9.9tn cumulative, and net debt stood at ₩10.6tn in 2Q26. However, SDI still holds a 10.22% stake in Samsung Display, worth roughly ₩9.1tn at the recent transaction price. Having a card to play without a rights offering is an advantage over peers; SK On has gone back to equity investors repeatedly. On the flip side, equity-method income drops by about 33%, so from 2027 the core business has to carry more of the load.

2. Technicals: A Squeeze Inside An Uptrend

Over the past year the stock has gone from ₩207,000 to ₩567,000, up 174% (567 / 207 = 2.74x). The 365-day trendline is still rising at about +120% annualized.

What stands out is the Bollinger Band width: 14.1%, in the bottom 10% of the past year. Squeezes like this often resolve with a big move in one direction. Up or down.

A couple of things bother me. Volume is shrinking as the price rises: 20-day average volume is 0.83x the 60-day average. On-balance volume (OBV) is also diverging from price.

The stock sits just above Support 1 (₩555,000-568,000) and just below Resistance 1 (₩578,000-597,000). The ₩578,000-597,000 zone is a thin, low-volume area over the past year.

Both the Aug 31 high and the Oct 8 intraday high (₩591,000) were rejected here. A break through could run quickly into the low ₩600,000s.

Above that, though, ₩600,000-720,000 is full of trapped supply from the April-June highs. Here’s the math on buying now at ₩567,000:

• Downside to my stop at ₩457,000: -19%
• Upside to first target at ₩600,000-638,000: +6-13%
• Risk/reward: about 1:0.5

For a cautious investor like me, that’s not a spot where I can pull the trigger.

3. Flows: Institutions Are Driving This Stock

Every month in which the stock gained more than 30% was a month of heavy institutional net buying. In June, when it fell 29%, institutions sold ₩366.1bn. Cumulative 12-month net buying:

• Institutions: +₩1.47tn
• Foreigners: +₩1.09tn
• Retail: -₩2.45tn

Retail got off the train early. Again.

Estimated average cost is ₩513,000 for institutions and ₩534,000 for foreigners. The current price is 10.5% above the institutional cost basis and 6.2% above the foreign one (567/513, 567/534).

If the stock pulls back to ₩510,000-530,000, it’s near their breakeven, where defensive buying is likely to show up. That’s why I set my first buy zone at ₩530,000-550,000.

4. Scenarios And Trading Plan

12-month scenarios (my own judgment):

• Bull, 25%: ₩800,000 (+41%). 3Q26 profitable ex-one-offs, WIP converts to revenue, 2027-28E estimates move up.
• Base, 50%: ₩650,000-700,000 (+15-23%). Quarterly profits continue, EV losses persist, overhead supply gets absorbed.
• Bear, 25%: ₩450,000 (-21%). 3Q26 loss-making ex-one-offs, ESS price competition, estimate cuts.

The probability-weighted value is ₩650,000 (0.25×80 + 0.5×67.5 + 0.25×45, in ₩10,000s, using the base-case midpoint). That’s +15% from here.

There’s upside, but the bear-case drawdown (-21%) is significant. Better to build in tranches as conditions are confirmed than to go all in at once.

Trading plan

• At ₩567,000 now: no new buys; existing holders hold
• Pullback tranche 1, ₩530,000-550,000: 30%
• Pullback tranche 2, ₩490,000-510,000: 30%
• Breakout add: 40%
• Stop: close below ₩457,000 (₩555,000 for the breakout tranche)

The breakout add requires all three of the following:

1. A close above ₩597,000 after 3Q26 results
2. Volume at 1.5x normal
3. Institutions and foreigners net buying together

If it breaks out without a pullback first, I start with just the 40%. And if neither happens? I wait.

What I’m Watching

1. Late-October 3Q26 results: profit ex-compensation and AMPC, 30%+ ESS revenue growth, lower WIP inventory, changes to 2027E consensus
2. Flows: joint institutional/foreign buying on a break above ₩597,000; whether foreign ownership breaks above 26.7%
3. November: Bank of Korea rate decision; any changes to US 45X and 48E rules
4. 4Q26: Indiana LFP mass production and rising AMPC, the New Carlisle ESS conversion, new North American orders

When 3Q26 results are out, I’ll come back and review them against this piece.

Disclosure: I have a long position in Samsung SDI (006400.KS). This is a personal investment journal, not investment advice. Scenario probabilities and price levels are my own judgment. Do your own due diligence.

Samsung SDI series: Part 1 · Part 2 · Part 3
🇰🇷 한국어 원문 · Originally written in Korean on Oct 13, 2026. Charts are in Korean; key figures are restated in the text.

At the end of Part 1, I said I’d compare Samsung SDI with SK Hynix to see how far along SDI is in its turnaround.

The question I’m trying to answer: after a ~170% run this year, does SDI’s stock still have room to go?

I benchmarked it against SK Hynix’s 2022-2024 turnaround. Like SK Hynix back then, SDI is in the early innings of a recovery, following the same sequence: share price bottom, then peak losses, then a return to profit.

My concern is that the stock has run ahead of earnings, and by a lot.

That said, investing is relative, not absolute. On growth, SDI looks more attractive right now than the other market-leading sectors, and I’ll concede that point. It’s why I raised my weighting in Korean battery names last month.

Still, I think the right move is to wait for 3Q26 results in late October, check a few things, and only then size up. Before that, I’ll only buy in tranches if the price comes down enough.

Four things I want to see:

1. Has work-in-process (WIP) inventory come down?
2. Has ESS revenue grown by 30%+?
3. Is the business profitable ex-compensation and ex-AMPC?
4. Are 2027E+ earnings estimates moving up alongside?

If all four check out, earnings will have caught up with the share price.

Three reasons I’m staying conservative:

1. At the same turnaround stage, SDI’s stock has risen twice as much as SK Hynix’s did.
2. “Next stage” signals (inventory drawdown, rising customer advances) haven’t appeared yet.
3. Growth is outstanding, but upgrades are concentrated in this year and the durability (delta) is lacking.

Let’s go one by one.

1. Same Turnaround Stage, Twice The Share Price Move

SK Hynix’s share price bottomed one quarter before peak losses and four quarters before returning to profit.

SK Hynix: share price bottom Dec 2022 → peak loss 1Q23 → back to profit 4Q23

Now Samsung SDI:

Samsung SDI: share price bottom 2Q25 → peak loss 3Q25 → back to profit 2Q26

Same sequence. But the share price gain up to the breakeven quarter is very different:

• SK Hynix: +89%
• Samsung SDI: +182%

At the same stage, SDI has run about twice as far (182 / 89 = 2.04x).

The earnings power to back it up is different too. SK Hynix went on to operating margins of 40%, which supported the stock. SDI’s 2027E operating margin is 8-9%, and most of that is AMPC (the US advanced manufacturing production credit). It feels like the market has already gotten well ahead of itself.

2. No “Next Stage” Signal Yet

At SK Hynix, inventory flagged the recovery first. Finished goods inventory fell 48% from its 2Q23 peak. SDI is going the other way.

Samsung SDI inventory, 2Q25 → 2Q26:

• Total inventory: ₩2.58tn → ₩3.68tn (+43%)
• Work-in-process: ₩0.92tn → ₩1.86tn (+102%)
• Customer advances: ₩1.09tn → ₩0.61tn (-44%)

Inventory has built up while advances have fallen.

2Q26 inventory of ₩3.68tn matches the 2Q24 peak. Days of inventory are at 118, the longest in the last ten quarters. Small-cell utilization has risen from 57% to 81%, so demand is clearly back. But it isn’t showing up in customer advances yet.

The finished-goods drawdown that marked SK Hynix’s turn hasn’t been confirmed at SDI. To be fair, the WIP could simply be product waiting to ship. According to IBK Securities, some domestic grid ESS revenue slipped from 2Q26 into 3Q26. If WIP falls and ESS revenue grows 30%+ in 3Q26, that reading will be vindicated.

3. Growth Is Outstanding, Durability Less So

On points 1 and 2 alone, SDI looks weaker than SK Hynix’s powerful 2022 turnaround. But again, investing isn’t graded on an absolute scale. What matters is how attractive it is relative to other opportunities at the same moment.

What the market is looking at in SDI and Korean batteries right now is growth over this year and next. So I checked the growth numbers.

My comparison group is the other leading theme in Korea: semiconductor equipment and materials, represented by HPSP and PSK Holdings. Figures are YoY growth in FnGuide operating profit consensus (as of Oct 8, 2026). First, the good news:

2027E operating profit growth

• Samsung SDI: +235%
• HPSP: +54.6%
• PSK Holdings: +50.5%

SDI’s 2027E growth is more than 4x the equipment names (235 / 54.6 = 4.3x; 235 / 50.5 = 4.7x).

2028E operating profit growth

• Samsung SDI: +74.3%
• HPSP: +22.3%
• PSK Holdings: +14.4%

Still more than 3x in 2028E (74.3 / 22.3 = 3.3x; 74.3 / 14.4 = 5.2x).

That’s probably why the market is so focused on SDI’s growth. The problem is durability.

First, the estimate upgrades are concentrated in this year.

Operating profit consensus, 3-month change

• 2026E: ₩306.3bn → ₩446.3bn (+46%)
• 2027E: ₩1.398tn → ₩1.495tn (+7.0%)
• 2028E: ₩2.430tn → ₩2.605tn (+7.2%)

The 2026E upgrade is ₩140bn, almost exactly the size of the ~₩150bn GM JV compensation expected in 3Q26. To me, this looks less like a higher long-term earnings outlook and more like a one-off being baked into this year.

Second, growth is decelerating. I call the change in growth rate versus the prior year the “delta.” Going fast and accelerating are two different things.

Delta (2028E growth minus 2027E growth)

• Samsung SDI: -160.7pp
• HPSP: -32.2pp
• PSK Holdings: -36.1pp

SDI’s deceleration is 4-5x that of the equipment names (160.7 / 36.1 = 4.5x; 160.7 / 32.2 = 5.0x).

+235% in 2027E is still huge growth. But by 2028E, the delta turns sharply negative.

In my experience, the market tends to get excited when the delta is expanding. Current consensus doesn’t see that happening.

Base effects matter, of course. Growth off a 2025 loss is bound to be high, and the slowdown is bound to look steep. In absolute terms, the increments are similar:

• 2027E increase: +₩1.049tn (14,950 – 4,463, in ₩100m)
• 2028E increase: +₩1.110tn (26,054 – 14,950)

So growth is both a strength and a weakness. The level is far above the equipment names; the durability is underwhelming. Which one you weight more heavily is the crux of the debate.

My view is that for the market to get excited again, the delta needs to improve, which means 2027E+ estimates need to move higher.

In the late-October 3Q26 results, I’ll be checking the four criteria above:

1. Has WIP inventory come down?
2. Has ESS revenue grown by 30%+?
3. Is the business profitable ex-compensation and ex-AMPC?
4. Are 2027E+ earnings estimates moving up alongside?

If they’re confirmed, I think adding to the position is the right call.

If the growth is attractive, the remaining question is price. How much should you pay for this growth?

In the final part, I lay out valuation and my trading plan.

Disclosure: I have a long position in Samsung SDI (006400.KS). This is a personal investment journal, not investment advice. Scenario probabilities and price levels are my own judgment. Do your own due diligence.

Samsung SDI series: Part 1 · Part 2 · Part 3
🇰🇷 한국어 원문 · Originally written in Korean on Oct 13, 2026. Charts are in Korean; key figures are restated in the text.

Samsung SDI (006400.KS) posted ₩203.8bn of operating profit in 2Q26, returning to the black after seven straight quarters of losses. The stock has gained 174% over the past twelve months.

Energy storage (ESS) has been a sector I follow closely even without a position.

Back in August 2025, when I wrote about the opportunity for Korean battery makers in the US BESS market, I concluded that SDI was the one to watch over LG Energy Solution. My reasoning: the prohibited foreign entity (PFE) rules in the One Big Beautiful Bill Act (OBBBA) made the exit of Chinese cells from the US market a matter of time, and with a market cap of just ₩15.5tn at the time, SDI was the name where ESS could actually move the needle on group earnings.

The problem was the risk/reward. I saw 36% downside against less than 1:1 upside, so I shelved it as “an idea to revisit as SDI’s order book builds.”

In January 2026, when ERCOT, PJM and SPP started floating curtailment measures for data center power supply, I argued that BESS would become a must-have for data centers. In July, looking at Australia’s grid, I wrote that there is no easier fix for grid stress than storage. Yet through all of that, I held zero exposure to batteries or ESS.

My earlier notes on ESS (in Korean):

• The potential of batteries (ESS) through the lens of Australia’s power market (Jul 2026)
• ERCOT, PJM, SPP curtail data center power: a tailwind for BESS and fuel cells (Jan 2026)
• If Korean battery makers have a shot in US BESS, it is probably… (LGES vs. Samsung SDI, Aug 2025)

The numbers have moved a lot since then. SDI’s market cap has gone from ₩15.5tn to ₩45.7tn (₩567,000 close on October 8).

And the recent price action across Korean battery names is hard to ignore. It’s flows and narrative moving first, not fundamentals. Stocks that used to be lumped together as “battery companies” are being re-rated as AI power infrastructure plays. This didn’t feel like a “keep watching” moment anymore, so I started a position.

Then I took SDI apart from scratch: DART filings, broker reports, flow data. The write-up got long, so I split it into three parts:

1. Part 1: industry and earnings, i.e. the quality of earnings
2. Part 2: turnaround stage and the delta in earnings revisions
3. Part 3: valuation, technicals and my trading plan

As always, this is a record I fully expect to be wrong about in places.

1. Industry: The Growth Engine Is Shifting From EV To ESS

Global ESS installations are expected to grow 50% to 459GWh in 2026, while EV battery demand grows only 13% to 1.5TWh. ESS as a share of total battery demand rises from 19% to 23%.

EV demand is diverging by region: Europe +20%, China +5%, and the US -10%.

In the US, ESS demand is being driven by AI data centers and a shortage of grid capacity. Data center IT load is projected to climb from 43GW in 2026 to 91GW by 2030. With gas turbine lead times at around four years, storage is the fastest thing you can deploy, which is exactly what we saw play out in Australia.

The key is the US Section 48E investment tax credit. It requires the non-Chinese share of the supply chain to rise from 55% in 2026 to 75% by 2030. After credits, estimated installed cost is $241.5/kWh for Chinese cells vs. $135.1/kWh for Korean makers producing in the US.

Last year I said the PFE rules made a Chinese exit inevitable, and that call seems to be playing out. Some forecasts now have Chinese cells’ share of US ESS falling from 71.2% in 1H26 to just 3.9% by 2028.

SDI has signed two US ESS supply deals this year: roughly ₩3tn with Tesla (per press reports) and about ₩1.5tn with a US energy company. Both will be supplied from the StarPlus Energy plant in Indiana.

EV is the weak spot. SDI’s largest customer, BMW, has shifted its new platform toward CATL, and SDI’s EV volumes have now declined for three years running.

2. Earnings: Back In The Black, But…

Operating profit bottomed at -₩591.3bn in 3Q25 and turned positive at ₩203.8bn in 2Q26. Gross margin recovered from 5.5% to 24.9%, above 2024 levels.

On the headline numbers, it’s a clean turnaround. Dig in, though, and the story changes.

2Q26 operating profit of ₩203.8bn = ~₩190bn tariff refund + ₩107.7bn AMPC + ~-₩94bn everything else.

Excluding the tariff refund and AMPC, SDI is still loss-making. On top of that, 1H26 equity-method income (₩516.4bn) was larger than pre-tax income (₩435.8bn). In other words, most of the profit came from SDI’s stake in Samsung Display.

So what about 3Q26?

DS Investment & Securities expects ₩257.5bn of 3Q26 operating profit and Daishin Securities ₩259bn, roughly twice the consensus range of ₩131.8bn to ₩141.5bn.

But those numbers include about ₩150bn of compensation from the GM joint venture plus ₩103.5bn of AMPC. Back those out and you’re left with roughly ₩4bn. Essentially breakeven.

That’s not meaningless. 3Q26 is the first quarter without the tariff refund, and not being in the red even after excluding one-offs is a real improvement over 2Q26. ESS revenue is expected to rise 35% QoQ on delayed domestic shipments, and the small-cell business is expected to turn profitable. In 4Q26, ESS revenue could jump another 50-60% as the Indiana LFP line enters mass production.

3. Most Of 2027 Earnings Is AMPC

This is the part I struggle with most.

Hana Securities models 2027 operating profit of ₩1.48tn, of which ₩1.40tn (94%) is AMPC. DS Investment has ₩1.8tn with ₩1.16tn (64%) from AMPC. Estimates vary, but either way more than half of the profit is tax credits. The EV segment is expected to stay loss-making through 2028.

AMPC rates start stepping down in 2030 and phase out entirely by 2033. So if US policy shifts or the US lines ramp late, the 2027-2028 earnings outlook could be knocked over wholesale.

There’s an upside too. Data center BBUs (where SDI has roughly 50% cell share) and UPS are profitable without AMPC, and related revenue grew more than 70% YoY in 2Q26. Personally, I think we may eventually see a scenario where the market values SDI not as a “battery company” but as an “AI power infrastructure company.”

Part 1 Takeaways

1. The industry direction (EV to ESS, decoupling from China) favors Samsung SDI.
2. The swing to profit is real, but both 2Q26 and 3Q26 are at or below breakeven once you strip out one-offs and AMPC.
3. 2027 earnings are also heavily AMPC-dependent. This is a structure that carries policy risk.

Ultimately, what matters in the late-October 3Q26 print is earnings ex-compensation and ex-AMPC.

In Part 2, I compare SDI with SK Hynix’s 2022-2024 cycle to figure out where SDI is in its turnaround.

Disclosure: I have a long position in Samsung SDI (006400.KS). This is a personal investment journal, not investment advice. Scenario probabilities and price levels are my own judgment. Do your own due diligence.