Korea’s top battery maker Samsung SDI is likely to make a loss throughout the year due to continued loss from its car battery segment despite the strong sales of Samsung Electronics’ Galaxy S7, according to analysts Tuesday.

According to market watchers, the latest quarterly earnings of Samsung SDI, which posted 700 billion won ($606 million) in operating loss in the first quarter, is expected to see another deficit of 30 billion won in the latest quarter. Also, the company may not turn around this year if anti-Korea Sentiment continues to grow in the Chinese market -- which accounts for around 30 percent of the company’s total sales -- due to the THAAD deployment. 


“Samsung SDI is expected to post an operating loss of 28 million won in the second quarter due to massive loss from mid and large batteries despite solid performance of Samsung’s smartphones,” said Cho Jin-ho an analyst from Mirae Asset Securities in his latest report.

“The Chinese government’s refusal to provide subsidies for Korean battery-makers further hampers the firm’s profitability in the next quarter,” he added.

In June, the Chinese government did not include Korean battery-makers, including Samsung SDI and LG Chem, in its list of companies to receive subsidies.

Most recently, Samsung SDI was set back again as China’s automobile company JAC Motors stopped the production of its sport-utility vehicle iEV6s using the Korean firm’s batteries. The move apparently came out of fear that it may not receive subsidies from the Chinese government when selling the cars.

Lee Won-sik, an analyst from Hana Daetoo Securities also said “Samsung SDI is expected to continue to make a loss in the third and fourth quarters due to a series of issues arising in China alongside growing costs in raw materials for batteries.”

On the news that JAC stopped the production of its vehicles using Samsung SDI’s batteries, the company’s share price went down 0.9 percent to close at 105,000 won on Tuesday.

By Shin Ji-hye (shinjh@heraldcorp.com)