[Reporter’s Notebook] One Year Until LG Energy Solution’s IPO... Time to Regain Composure

[Asia Economy Reporter Kum Boryeong] After LG Chem announced the establishment of 'LG Energy Solution (tentative name)' following the spin-off of its battery division, individual investors' anger has intensified. On the Blue House petition board, a post titled "Please prevent damages to individual investors caused by LG Chem's physical spin-off" was also uploaded. Comments comparing the LG Chem spin-off to "steamed buns without red bean paste" and "Big Hit Entertainment without BTS" were posted under articles about the spin-off.

Individuals began panic selling. From the 16th, when talks of the physical spin-off emerged, until the day before, they net sold LG Chem shares worth 135.4 billion KRW over two days. The stock price, which was 726,000 KRW on the 15th, dropped sharply to 687,000 KRW on the 16th and 645,000 KRW on the 17th.

Various opinions are circulating in the market about whether the physical spin-off is a "negative" or "positive" factor. However, considering that about a year remains until LG Energy Solution's initial public offering (IPO) and looking at past cases of other companies, it is premature to label it purely as a negative. On February 3, 2016, EcoPro announced a physical spin-off of its battery division, and the closing price the next day was 11,350 KRW. The stock price fluctuated afterward but recorded 32,250 KRW the day before EcoPro BM's listing on March 5, 2019.

At least until the IPO, LG Chem plans to retain 100% ownership of the battery division, so there is no change at this point, according to analysis. Securities firms have either maintained or raised their target prices for LG Chem. Kang Dongjin, a researcher at Hyundai Motor Securities, explained, "The only way to enjoy the growth and profitability momentum of LG Chem's secondary battery business until the IPO is to hold the current shares." LG Chem plans to maintain at least 70-80% of the shares even after LG Energy Solution's IPO.

Stock experts always emphasize a "calm perspective" in investing. They advise looking properly at the company's value rather than getting excited when the stock price falls. If reversing the physical spin-off is difficult, it is necessary to observe future developments and make investment decisions accordingly. Foreign investors in LG Chem actually net bought shares worth 133.5 billion KRW on the 16th and 17th. With a year remaining, now is the time to regain composure.

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