LG Chem Tragedy: "Now the Average Target Stock Price Has Plummeted Below 1 Million Won"

[Asia Economy Reporter Lee Seon-ae] As LG Chem's stock price, which had been strong this year, is collapsing helplessly, securities firms' average target stock price is also expected to fall below 1 million KRW.

According to financial information company FnGuide on the 30th, the current average target price for LG Chem is around 1.1 million KRW. This is based on reports from the past three months, with 18 securities firms estimating. On July 30, Ebest Investment & Securities lowered LG Chem's target price from 1.31 million KRW to 939,000 KRW, and on October 26, Hana Financial Investment lowered it from 1.15 million KRW to 1.05 million KRW and maintained it, bringing LG Chem's average target price down to the 1.1 million KRW range.

The stock price, which rose to 1.05 million KRW during intraday trading at the beginning of the year, fell 41.3% to 616,000 KRW on the 27th. The difference between the 52-week high and 52-week low is practically halved. The reason for the stock price decline is the physical division. LG Chem's battery business division was split off to establish LG Energy Solution and is pushing for an initial public offering (IPO), accelerating investor withdrawal. On the 13th, even minority shareholders' opinions opposing LG Energy Solution's listing were posted on the Blue House's public petition board.

With LG Energy Solution's listing scheduled for next month (January next year), LG Chem's supply and demand instability is expected to continue. Accordingly, on this day, Yuanta Securities lowered LG Chem's target price by 19.6%, from 970,000 KRW to 780,000 KRW. Researcher Hwang Gyu-won of Yuanta Securities said, "The downward revision of LG Chem's target price considers the petrochemical downturn cycle and the decrease in shareholding after the battery listing (LG Energy Solution)," adding, "If evaluated most conservatively, considering the battery value at 23 trillion KRW and basic materials value at 11 trillion KRW, the bottom price could be around 550,000 KRW."

It is expected that a flood of downward revisions of LG Chem's target price will occur next year, and the average target price will now fall below 1 million KRW. Since the gap between the securities firms' average target price and the current price is approaching 80%, an adjustment of the gap is inevitable. Investors who invested in LG Chem based on the future growth potential of its battery business are likely to sell LG Chem and buy LG Energy Solution.

An analyst who requested anonymity said, "The risk of physical division has been clearly proven in LG Chem," adding, "However, LG Chem remains an attractive company even without LG Energy Solution, so buying interest is expected to gather as everyone predicts the bottom price. But predicting the stock price bottom is not easy, and supply and demand will fluctuate around LG Energy Solution's listing."

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