Samsung SDI Co Ltd

006400: XKRX (KOR)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	₩158,235.00	Cgfn	Rxnmvtwnm

Samsung SDI Earnings: Dimmed EV Outlook Pressured Near-Term Revenue Growth and Margin

Vincent Sun

Jul 31, 2024

No-moat Samsung SDI’s June-quarter revenue and operating profit missed our expectations. Sales of lithium-ion batteries fell 26.5% year on year in the quarter due to the global electric vehicle, or EV, demand slowdown and a drop in metal prices. We estimate that the operating margin for the EV battery division declined to the low single digits, as the lithium price drop hurt product pricing and profitability. We lowered our 2024-28 revenue estimates by 11%-15%, mainly due to a reduced outlook for EV battery demand. To factor in margin weakness, we cut our 2024-28 operating income forecasts by 9%-36%.

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