[THE INVESTOR]
Samsung SDI, which saw a whopping 700 billion won ($600 million) in operating losses in the first quarter, is expected to improve profitability in the second quarter, largely buoyed by growing demand for automotive batteries.
On June 14, Kiwoom Securities estimated that the company’s operating loss could be reduced to stand at about 33.9 billion won for the April-June period.
“As marketability is improving in the electric vehicle market, Samsung SDI’s battery business is also expected to improve profitability,” said Kim Ji-san, an analyst at Kiwoom Securities.
The analyst cautiously predicted that the company could make a turnaround in the third quarter, citing positive signs in the EV market.
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Samsung SDI's EV battery plant in Xian, China |
In China, EV sales started recovering from March, while second-generation models such as those for the GM Bolt, BMW i3 and Tesla Model 3 are scheduled to debut in Europe and the U.S. from the end of this year.
In the first quarter, Samsung SDI, along with LG Chem, was hit hard by the Chinese government’s subsidy suspension for electric buses powered by its batteries.
“The Chinese government is likely to shift its policy direction within the year. That would be a big boost for the company’s Chinese business,” the analyst said.
By Lee Ji-yoon (
jylee@heraldcorp.com)