Samsung SDI (006400.KS) surged more than 8% after moving to secure investment funds through the sale of its stake in Samsung Display, while positive outlooks on the secondary battery sector from brokerages lifted related stocks across the board.
As of 9:45 a.m. on the 24th, Samsung SDI was trading up 8.16% from the previous session, according to the Korea Exchange. The company's plan to raise a large sum of capital is seen as having boosted investor sentiment. After the market close on the 21st, Samsung SDI disclosed that it would sell its stake in Samsung Display for about 4.45 trillion won ($3.2 billion). While the company did not detail how the funds would be used, the market is focusing on the possibility that they will first be directed toward North American investments, including SynergySells, a battery plant under construction in New Carlisle, Indiana.
Analysts said expectations are growing in particular for an expansion of the North American energy storage system (ESS) business. Park Jin-soo, an analyst at Shinyoung Securities, said the disclosure was positive in that it clarified how Samsung SDI would fund the expansion of ESS battery production capacity in North America. "SynergySells is set to be converted into a wholly owned entity, so unlike a joint venture structure, 100% of battery profits can be recognized as net profit attributable to the controlling shareholder," Park explained.
Meanwhile, secondary battery stocks also rallied together. L&F was up 15.69%, while POSCO Future M (9.17%), SK Innovation (6.09%) and LG Energy Solution (3.49%) all posted gains. The moves are seen as reflecting "sector rotation" expectations that the market rally, recently concentrated in semiconductors, could spread to other industries.
Analysts said that despite slowing electric vehicle demand, a new growth driver for the secondary battery industry is emerging around ESS. In particular, they projected that ESS demand could grow rapidly as the expansion of AI data centers increases power shortages and the need for power quality management. Kim Hyun-soo, an analyst at Hana Securities, said there is a need to prepare for a sharp rise in ESS orders as three factors — energy shortages, energy security and power quality management — come together. "We recommend buying Samsung SDI and LG Energy Solution," Kim said.
