Hana Securities said on the 20th that the multiple (corporations valuation multiple) is expected to improve for Samsung SDI due to the sale of its equity in Samsung Display. It maintained its investment opinion of "buy (BUY)" and raised the target price to 469,000 won from 420,000 won. Samsung SDI closed the previous trading day at 408,000 won.
Earlier, Samsung SDI disclosed it would pursue the sale of its equity in Samsung Display and other assets to "secure investment resources and improve its financial structure." However, the size and terms of the sale have not been finalized.
Kim Hyun-su, an analyst at Hana Securities, said, "Based on last year's third-quarter business report, the book value of Samsung SDI's equity in Samsung Display is about 10.1 trillion won. Assuming Samsung SDI's average annual operating profit over the next two years at about 4 trillion to 5 trillion won and applying the price-earnings ratio (PER) of China's panel maker BOE, the fair value of Samsung Display is around 65 trillion to 70 trillion won."
He added, "Applying the derived book value and BOE's price-to-book ratio (PBR) of 1.1 times in 2026 and 1.04 times in 2027, Samsung SDI's equity stake can be monetized at around 1.1 times book value," and analyzed, "If the entire equity holding is converted to cash, cash inflows of up to around 11 trillion won are expected."
In this case, the financial structure is expected to improve significantly. As of the end of the fourth quarter last year, Samsung SDI's assets were 42.3 trillion won, liabilities were 18.7 trillion won, and equity was 23.6 trillion won, putting the debt ratio at 79.3%. Kim said, "Assuming cash inflows of around 11 trillion won and no change in liabilities, the debt ratio will fall to the mid-50% range."
Liquidity indicators are also expected to improve. As of the end of the fourth quarter last year, current assets were 8.7 trillion won and current liabilities were 9.8 trillion won, leaving the current ratio at just 0.89 times. Kim analyzed, "If cash flows in, current assets will increase to about 19.7 trillion won, improving the current ratio to around 2 times."
However, he added that "if a gradual monetization method is chosen instead of a one-time sale, it may take time to improve the financial structure."
He also saw a contraction in net profit as unavoidable due to a decrease in equity-method gains. Kim said, "Annual equity-method gains were 800 billion won in 2024 and 600 billion won in 2025, but they are expected to gradually shrink going forward," adding, "Accordingly, for the estimated 2027 net profit attributable to controlling shareholders of about 1 trillion won, there is a possibility the earnings estimate will be slightly revised downward if changes in the equity stake are reflected."
Nevertheless, Kim judged, "Even considering the decrease in equity-method gains, the share-price upside from multiple re-rating will be stronger."
Kim said, "One reason Samsung SDI has been assigned a relatively lower multiple than LG Energy Solution was a lack of cash and the resulting missed investment timing," adding, "If a significant amount of cash is secured through this equity sale, this corporations value discount argument could be resolved."
He added, "We applied 37 times, the upper end of the 24-month forward price-earnings ratio (PER) over the past five years, to the estimated 2027 net profit attributable to controlling shareholders," explaining, "This level takes into account LG Energy Solution's PER upper bound of 43 times."