[Click eStock] "LG Chem Expected to Generate High Profits in Q2 Following Q1"

[Asia Economy Reporter Hwang Yoon-joo] On the 8th, LG Chem maintained its investment opinion of 'Buy' and a target price of 810,000 KRW for Hana Financial Investment, stating that its profit resilience has improved through portfolio strength, resulting in strong performance despite challenging external conditions.

Yoon Jae-sung, a researcher at Hana Financial Investment, stated, "Operating profit for Q1 is expected to be 939.7 billion KRW (QoQ +26%, YoY -33%), exceeding the consensus (834.7 billion KRW) by 13%."

Researcher Yoon explained, "Petrochemical operating profit is estimated at 576.6 billion KRW (QoQ -16%), showing resilience despite difficult conditions," attributing this to "vertical integration and the strength from holding a wide range of high value-added downstream products (ABS/PVC/EVA/SAP/caustic soda, etc.)."

He also analyzed, "Advanced materials operating profit is expected to be 101.2 billion KRW with strong performance," citing "robust cathode material sales driven by customers' inventory stocking movements, resulting in increased margin rates, and the full-scale profit contribution from separators acquired from LG Electronics."

Regarding Q2 performance, Researcher Yoon said, "Operating profit is expected to be 775.3 billion KRW (QoQ +3%, YoY +529%), indicating continued high profit generation," and evaluated, "Petrochemicals are expected to see a decrease in operating profit (494.5 billion KRW, QoQ -14%) due to high naphtha costs, but profit defense is sufficiently possible thanks to holding high value-added downstream products."

He added, "Advanced materials operating profit is 90 billion KRW, and LGES is 199.3 billion KRW, showing a slight decrease compared to the previous quarter but maintaining high profits," noting, "The slight decrease compared to the previous quarter assumes the removal of exchange rate effects and the impact of rising metal prices."

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