[Click eStock] "LG Chem Target Price 1 Million Won... 18% Up"

Samsung Securities raised the target price of LG Chem by 18% to 1,000,000 KRW.

On the 17th, Samsung Securities released a report on LG Chem, forecasting an operating profit of 700.9 billion KRW for the first quarter. This exceeds the market consensus by 10%.

Although the petrochemical industry downturn is expected to last longer than anticipated, the strong performance of the battery subsidiary and battery materials business is expected to offset this.

The basic materials segment is projected to record an operating loss of 76.9 billion KRW. While opportunity losses (150 billion KRW) due to scheduled maintenance will disappear, losses are expected to continue due to a worse-than-expected industry downturn.

The advanced materials segment is forecasted to have an operating profit of 149.5 billion KRW. Sales and operating profit of the cathode materials business are expected to be 1.5 trillion KRW and 136 billion KRW, respectively. Not only has the inventory adjustment by customers in the previous quarter been resolved, leading to a significant recovery in sales volume, but one-time costs have also disappeared, restoring profitability. The recent decline in metal prices is expected to be partially reflected in the second quarter rather than the first quarter.

The battery business announced preliminary results on the 7th, recording an operating profit of 633.2 billion KRW, exceeding market expectations. This reflects the impact of incentives from the U.S. Inflation Reduction Act (IRA) incorporated into operating profit (100.3 billion KRW).

Hyun-ryeol Cho, a researcher at Samsung Securities, said, "Despite China's reopening, the petrochemical industry downturn continues, but LG Chem is expected to record differentiated performance due to the strong battery-related business," adding, "The attractiveness of the diversified portfolio is expected to be further highlighted."

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