[Click eStock] 'Tantandae-ro' LG Chem, Battery Business Value Reaches 33 Trillion Won

Automakers Feeling Tesla Threat, Accelerate Electric Vehicle Launches
Possible Competition with China's CATL... "Advantageous on Overseas Stage"

[Asia Economy Reporter Minwoo Lee] An analysis has emerged suggesting that the value of LG Chem's electric vehicle battery business is approaching 33 trillion won. This is because the demand for batteries is expected to grow as the global automotive industry accelerates the adoption of electric vehicles.

On the 25th, Mirae Asset Daewoo raised the value of LG Chem's electric vehicle battery business from the previous 28 trillion won to 33 trillion won. This was based on applying a pre-tax operating profit (EV/EBITDA) multiple of 7 times to the 2023 target market value. The target stock price was also raised by 10% to 550,000 won.

Park Young-joo, a researcher at Mirae Asset Daewoo, said, "Recently, Tesla's electric vehicles have begun to directly threaten the internal combustion engine car market, and when existing automakers release electric vehicles with significantly improved product competitiveness, the market is expected to grow substantially around 2022-2023. Since battery suppliers are limited, in such a situation, the bargaining power of early battery suppliers like LG Chem will be strengthened."

He also predicted that LG Chem is competitive even compared to the Chinese battery company CATL. Park said, "Currently, CATL, with a market capitalization of 55 trillion won, is almost the only battery supplier in China and is expected to benefit from the rapidly growing Chinese market, enjoying higher profitability compared to other battery companies. However, since the Chinese government has effectively blocked Korean battery companies from entering the Chinese market, CATL is enjoying relatively high profitability, but once full competition begins, profitability may decline." He added, "At least until 2023, market share acquisition in the European market is limited, so LG Chem's sales growth is much faster."

Considering this, it is judged that the recently rising stock price of LG Chem still does not fully reflect the company's value. Park predicted, "There could be further increases due to positive factors such as establishing joint ventures with automakers and the spin-off of the battery business."

This content was produced with the assistance of AI translation services.