[Click eStock] "LG Chem, Time to Consider Valuation Bottom... Target Price Down"

DB Financial Investment diagnosed on the 28th that the possibility of further market slowdown for LG Chem is limited and that the valuation bottom should be considered. The investment opinion 'Buy' was maintained, but the target price was lowered from the previous 580,000 KRW to 450,000 KRW.

Seungjae Han, a researcher at DB Financial Investment, said, "Excluding LG Energy Solution, LG Chem's operating profit rebounded from the bottom in the fourth quarter of last year to the second quarter of this year," adding, "The advanced materials segment has seen the sharp decline in the average selling price (ASP) of cathode materials come to an end, and the petrochemical sector's profitability remains stagnant around the quarterly breakeven point (BEP), but volatility is decreasing." He further predicted, "In the main high-value-added synthetic resin (ABS) segment, absolute prices are steadily rebounding despite naphtha fluctuations, so the performance rebound is expected to continue in the third quarter."

Researcher Han continued, "The current price-to-book ratio (PBR) is 0.75 times, which is lower than 0.9 times during the financial crisis and 1.0 times during the COVID-19 crisis," and analyzed, "This means that derating is ongoing, but if the possibility of further sharp market declines in the advanced materials and chemical sectors is limited, it is also time to consider the valuation bottom."

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