Is K-Battery Near a Bottom? 5 Things to Check Before Buying July 2026
This article is based on the latest available news reports and official sources verified as of 2026-07-12 Korea Standard Time.
As of 2026-07-12, it is difficult to conclude that the entire K-battery sector has reached a bottom.
LG Energy Solution has fallen close to its 52-week low, but it continues to report operating losses excluding subsidies. Samsung SDI has shown signs of narrowing its losses, but its share price has already rebounded substantially from its low. SK Innovation is heavily influenced not only by batteries but also by its refining and energy businesses.
Ultimately, the question investors need to ask now is not "Have secondary battery stocks fallen significantly?" but "Has the deterioration in each company's earnings stopped?"
Even Within K-Battery, Stock Prices Are at Different Levels
Comparing the 2026-07-10 closing prices with their 52-week lows reveals clear differences.
LG Energy Solution stood at KRW 326,000, approximately 5.3% above its 52-week low of KRW 309,500. Based solely on its share price position, it is the closest to its low among the three stocks.
SK Innovation stood at KRW 102,900, approximately 17.3% above its 52-week low. However, its share price reflects not only SK On's battery performance but also refining margins, international oil prices, and its power generation and energy businesses.
Samsung SDI stood at KRW 434,000, approximately 148.6% above its 52-week low of KRW 174,600. Even if expectations for an earnings recovery are emerging, it would be difficult to describe its current price simply as being in a 'bottom range.'
Grouping all three companies together as stocks near their bottoms simply because they are close to their 52-week lows could cause investors to overlook their actual risks.
The Industry Is Growing, but Korean Companies Have Lost Market Share
From January 2026 to May, global battery usage for electric vehicles increased 16.3% compared with the same period a year earlier.
The battery market itself is not shrinking. The problem is that Chinese battery manufacturers are capturing a substantial share of that growth.
The global market excluding China also grew 21.8%, but the combined market share of LG Energy Solution, SK On, and Samsung SDI fell to 28.4%, down 8.7% percentage points from the same period a year earlier.
This means that growth in the overall market and an earnings recovery among Korean battery manufacturers are two separate issues. Even if electric vehicle sales increase, profitability at Korean manufacturers may not improve if price competition, weak sales among automaker customers, and overseas expansion by Chinese competitors occur simultaneously.
The First Criterion Is Operating Profit Excluding Subsidies
LG Energy Solution reported operating profit of KRW 113,300,000,000 for the 2 quarter of 2026.
On the surface, it appears to have returned to profitability after posting a loss in the 1 quarter. However, excluding U.S. production tax credits of KRW 241,000,000,000, its operating loss was KRW 127,700,000,000.
Tax credits for local production in the United States are genuine benefits available to the company. However, investors also need to examine results excluding subsidies to determine whether the company is generating profits from battery sales alone.
Therefore, rather than relying simply on a return to reported profitability, a better way to determine whether LG Energy Solution has passed its earnings bottom is to check whether losses excluding subsidies are narrowing for consecutive quarters.
Samsung SDI and SK On: Watch How Quickly Losses Narrow
Samsung SDI recorded an operating loss of KRW 155,600,000,000 in the 1 quarter of 2026. Although the company remained in the red, its losses narrowed significantly compared with the same period a year earlier.
The key question is whether increasing energy storage system (ESS) orders merely boost revenue or actually lead to improved profitability. Converting electric vehicle battery production lines for ESS use can involve conversion costs and lower factory utilization rates.
SK On reduced its operating loss to KRW 349,200,000,000 in the 1 quarter, narrowing its deficit from the previous quarter. However, its losses remain substantial, and its performance is sensitive to electric vehicle sales among North American customers and changes in factory utilization rates.
Rather than examining consolidated operating profit alone, SK Innovation investors should separately review revenue, operating losses, and shipment volumes in SK On's battery business.
How to Determine Whether a Bottom Has Actually Formed
First, when reviewing the latest earnings announcements, look beyond operating profit and examine profitability excluding subsidies and one-time gains.
Second, compare whether losses narrowed for just one quarter or improved for at least two consecutive quarters. Investors should also check whether factory utilization rates are rising and inventories are declining at the same time.
Third, examine changes in battery usage and market share for each company rather than focusing only on the overall market growth rate. If the market is growing while a particular company's battery usage or market share continues to decline, it is difficult to conclude that its competitiveness has recovered.
Fourth, when reviewing ESS order announcements, focus on the start of mass production and production line conversion costs rather than just the contract value. Even with a large order backlog, substantial initial costs could actually worsen short-term earnings.
Fifth, examine capital expenditure, borrowings, and operating cash flow together. Because the battery industry requires substantial investment in factories, financial pressure may persist if improvements in earnings do not translate into stronger cash flow.
Interpreting Each Stock's Current Position
LG Energy Solution appears to be a potential bottom candidate based on its share price position alone. However, it is difficult to conclude that the company has passed its earnings bottom when results are measured excluding subsidies.
Samsung SDI's narrowing losses and expectations surrounding ESS are being reflected in its valuation, but its share price has already risen significantly from its 52-week low. At this stage, the pace of future earnings recovery matters more than the appeal of buying at a low price.
SK Innovation needs to demonstrate an improvement in SK On's profitability, but its refining and energy businesses also influence its share price. It is difficult to predict the stock's direction based solely on conditions in the battery industry.
A more reliable way to identify a genuine bottom in K-battery stocks is to look for stabilization in earnings excluding subsidies, market share, and cash flow together, rather than simply focusing on how far share prices have fallen.
Instead of relying on a single earnings announcement or a one-day rebound in share prices, investors need to monitor whether losses continue to narrow through the following quarter. This article is intended as an investment reference based on publicly available information. Share prices and corporate earnings may change depending on market conditions and policy developments.
※ This article is provided for informational purposes to help readers understand market trends and does not constitute investment advice or a recommendation to buy any particular stock or asset. Final investment decisions and responsibility rest with the individual investor.