Analysts See Korean Battery Makers Beating Q3 Estimates on ESS, AMPC
Mirae Asset Securities projects LG Energy Solution at 403.7 billion won and Samsung SDI at 302.3 billion won, both above consensus; SK On is seen declining.
Analysts expect Korea's three major battery cell makers to report third-quarter operating profits above market consensus, driven by higher North American energy storage system (ESS) shipments and increased Advanced Manufacturing Production Credit (AMPC) subsidies.
Mirae Asset Securities projects LG Energy Solution's third-quarter operating profit at 403.7 billion won, above a market consensus of 290 billion won. The brokerage forecasts Samsung SDI's operating profit at 302.3 billion won, compared with a consensus of 107 billion won. SK On's third-quarter operating profit, by contrast, is expected to decline quarter-on-quarter.
North American ESS battery shipments reached 76GWh in the first half of the year, up about 83% year-on-year, according to SNE Research. Total AMPC for the battery makers is expected to rise to 466 billion won.
Samsung SDI's North American ESS line is scheduled to start operation in the fourth quarter. SK On's NeoVolta ESS volume will be supplied from 2027 over five years.
Background
In the previous two quarters, operating profits fell below market consensus due to initial ramp-up costs of North American ESS lines. In the second quarter, SK On received about 1.1 trillion won in tariff refunds and customer compensation, swinging to a profit. In August, SK On announced a 9GWh LFP-based ESS supply contract with US company NeoVolta, to be produced at a Georgia plant and supplied from 2027 over five years. According to IM Securities, that contract filled about half of this year's ESS order guidance.
Quick answers
What are the projected third-quarter operating profits for LG Energy Solution and Samsung SDI?
Mirae Asset Securities projects LG Energy Solution at 403.7 billion won and Samsung SDI at 302.3 billion won, both above market consensus.
How much did North American ESS battery shipments grow in the first half of the year?
North American ESS battery shipments reached 76GWh, up about 83% year-on-year, according to SNE Research.
When will Samsung SDI's North American ESS line start operating?
Samsung SDI's North American ESS line is scheduled to start operation in the fourth quarter.