[Yonhap News Photo]
Samsung SDI, the battery supplying unit of South Korea's largest conglomerate, took a further blow Monday with its brand value undermined by the global recall of Galaxy Note 7 smartphones as analysts forecast the cost of controlling damage may exceed one billion US dollars.
Throughout last week, Samsung SDI experienced a backlash from fans and investors with its share price falling 8.82 percent for five days. On Monday, the price fell 2.76 percent to close at 105,500 won (94.4 US dollars).
Samsung Electronics Co., the world's largest smartphone maker, has embarked on exchange programs at home and abroad for its flagship Note 7 phones since it announced a global sales ban and recall last Friday, admitting faulty parts have caused a series of battery explosions.
Customers can receive new smartphones or get refunded, but Samsung has not reported any disturbances yet at its service and marketing outlets. The recall came only two weeks after Note 7s were unveiled. Out of 2.5 million units shipped, about 1.45 million units have gone to consumers.
Samsung Electronics shares rose 0.56 percent to 1.606 million won.
Analysts agreed that the recall is a negative factor that would shave Samsung's third-quarter profits and sales by up two trillion won but its brand value is strong enough to absorb the current shock.
Hanwha Investment and Securities predicted the recall is expected to cost up to 800 billion. IBK Securities said Samsung may have to bear as much as two trillion won but the explosion of batteries would have a limited long-term impact on the picture of the global smartphone market.
NH Investment and Securities was more positive about Samsung's market position saying the company's quick and frank approach would contribute to regaining confidence from consumers and investors.
Aju News Lim Chang-won = cwlim34@ajunews.com
reporter
Park Sae-jin
swatchsjp@ajunews.com
