Samsung SDI Stock: Down But Not Out? Why Q4 2025 is the Key for Investors

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Samsung SDI, Awaiting a Q4 Turnaround: Crisis or Opportunity? Samsung SDI, Awaiting a Q4 Turnaround: Crisis or Opportunity? Samsung SDI, a leader in South Korea's secondary battery industry. With its recent stock performance and earnings announcement causing anxiety for many investors, let's explore together whether this is a moment of crisis or a new opportunity. Why Q2 2025 Earnings Fell Short of Expectations According to the DS Investment & Securities report, Samsung SDI's Q2 2025 performance unfortunately fell short of market expectations (consensus). While revenue was about 3.2 trillion KRW, the operating loss reached 397.9 billion KRW. So, why did this happen? The biggest reason was the slump in the large-to-medium-sized battery division . This was due to delays in electric vehicle (EV) supply to major clients and the increased burden of fixed costs from its joint venture (JV) with Stellantis. Furthermore, tari...

K-Defense's Secret Weapon: Why Hanwha Aerospace's Ammunition & MLRS Are Dominating Europe

The Future of K-Defense: Hanwha Aerospace

The Future of K-Defense, Forged by Shells and Rockets: A Deep Dive into Hanwha Aerospace

Hanwha Aerospace (012450), often called the 'heart of K-defense,' based on the latest analysis report from Kyobo Securities.

2025 Q2, A 'Surprise Earnings' Exceeding Market Expectations

Hanwha Aerospace recorded surprising earnings in the second quarter of 2025, significantly surpassing market expectations. Its revenue increased by 168.7% year-on-year to KRW 6.2735 trillion, and its operating profit of KRW 864.4 billion far exceeded the market's forecast. This strong performance is attributed to the delivery of 18 K9 self-propelled howitzers and 27 Chunmoo Multiple Launch Rocket Systems to Poland.

'Export Momentum' to Continue Through the Second Half of 2025 and 2026

The report suggests that Hanwha Aerospace's momentum will not stop here. It is expected that the remaining inventory from the first and second contracts with Poland, including over 140 K9 self-propelled howitzers and 162 Chunmoo MLRS, will contribute steadily to its earnings from the second half of 2025 through 2026. Furthermore, the delivery of K9 self-propelled howitzers and K10 ammunition resupply vehicles exported to Australia is also projected to be concentrated in 2026, promising stable growth for several years.

The New Growth Engines of K-Defense: 'Ammunition' and 'MLRS'

1. Ammunition Production Capacity Expansion and Global Supply Chain Issues

Following the Russia-Ukraine war, there has been a severe shortage of artillery shells worldwide. In Europe, especially, national reserves are nearly depleted after supporting Ukraine. To make matters worse, due to stricter EU regulations, the import of gunpowder from China has become difficult, causing production disruptions.

In this context, Hanwha Aerospace announced a large-scale investment in September 2024 to expand its ammunition production capacity (incremental propellant charges) to 500,000 to 600,000 rounds. This expansion, expected to be completed by 2027, could generate an additional KRW 1.5 to 2 trillion in revenue from direct exports.

2. 'Chunmoo (MLRS)' Heading for Europe

MLRS (Multiple Launch Rocket System) is a weapons system that fires multiple rockets simultaneously to strike a wide area. According to the report, there are virtually no domestic MLRS manufacturers in Europe, creating new demand.

Hanwha Aerospace's K239 Chunmoo has successfully entered the European market with a large-scale export contract with Poland. A local assembly plant in Poland is set to begin operations, with production capacity projected to expand to 150-200 units annually from 2025. This will be a significant step in increasing K-defense's penetration of the European MLRS market.

Investment Areas and Actionable Strategies

  1. Direct Investment in Defense Stocks: This strategy involves directly investing in defense-related stocks such as Hanwha Aerospace. It is crucial to thoroughly analyze the company's performance and contract status and to determine buy and sell timing based on market trends.
    • Risk: Market volatility, geopolitical risks, and the possibility of large-scale contract cancellations.
  2. Investment in Defense ETFs (Exchange-Traded Funds): By using ETFs that are diversified across multiple defense companies, investors can mitigate the risks associated with individual stocks. Various domestic and international defense ETFs are available for portfolio diversification.
    • Risk: The influence of specific companies can be significant depending on the ETF's composition and weighting, and management fees are incurred.
  3. Inclusion in a Long-Term Growth Portfolio: The defense industry is expected to see long-term growth due to geopolitical instability and the increasing demand for replacing aging weapons. This strategy involves incorporating a portion of the portfolio into defense stocks from a long-term perspective, without being swayed by short-term price fluctuations.
    • Risk: As a long-term investment, if market conditions deteriorate or company growth slows, losses could accumulate over an extended period.
  4. Dollar-Cost Averaging Strategy: This method involves consistently purchasing a fixed amount of a stock whenever its price drops, thereby lowering the average purchase price. It is an effective way to manage investment risk in a volatile market.
    • Risk: If the stock price continues to fall, contrary to expectations, losses can accumulate.

Disclaimer

This article is based on the Kyobo Securities corporate analysis report and is intended for general informational purposes only. All investment decisions should be made based on individual judgment and responsibility, and this article should not be considered personal investment advice. It is recommended to consult with a professional and make careful decisions based on sufficient information before investing. All investments carry the risk of loss of principal.

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