[Click eStock] Will LG Energy Solution Surpass 500,000 Won?

On the 17th, visitors are touring the LG Energy Solution exhibition hall at 'InterBattery 2022' held at COEX in Samseong-dong, Gangnam-gu, Seoul. Photo by Hyunmin Kim kimhyun81@

[Asia Economy Reporter Hwang Junho] On the 15th, LG Energy Solution's stock price, which had been steadily rising from the mid-350,000 KRW range per share to the mid-440,000 KRW range, is expected to require the gradual resolution of semiconductor supply shortages as a necessary condition for the upward trend.

Kim Hyunsoo, a researcher at Hana Financial Investment, stated on the 30th, "The stagnation in sales growth due to semiconductor supply shortages amid the increasing burden of depreciation expenses each quarter is clearly a factor limiting the pace of profitability improvement," adding, "We believe that when the recovery of electric vehicle battery sales growth and improvement in electric vehicle battery margins due to the resolution of semiconductor supply shortages are confirmed, the stock price will regain upward momentum."

Hana Financial Investment revised upward its earnings estimates for LG Energy Solution. For the first quarter of this year, sales are projected to be 4.2 trillion KRW, down 5% from the previous year, and operating profit is expected to shrink by 59% to 137.9 billion KRW compared to the previous year. Although the stagnation in shipments of electric vehicle batteries in the medium and large battery segment is expected to continue due to semiconductor supply shortages and the Russia-Ukraine war, sales in the small battery segment are anticipated to increase significantly as Tesla's demand for cylindrical batteries has been stronger than expected.

In particular, regarding the recent outlook that risks will increase due to rising raw material prices, the assessment was negative. Researcher Kim said, "The current electric vehicle battery contract structure allows for compensation from automobile OEM customers for price increases in key mineral resources such as nickel and lithium, so concerns about profitability deterioration due to rising raw material prices are excessive."

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