[Click eStock] "LG Energy Solution, Resolving Oversupply More Important Than Shipment Increase"

On the 29th, SK Securities maintained a target price of 485,000 KRW and a 'Buy' investment rating for LG Energy Solution, stating that resolving oversupply is more important than an increase in shipment volume.

Researchers Hyungwoo Park and Mingyu Kwon evaluated, "Operating profit for the third quarter was 448.3 billion KRW, a 130% increase compared to the previous quarter," and added, "The AMPC scale was 466 billion KRW, and excluding this, losses continued."

The two researchers forecasted, "Operating loss for the fourth quarter is expected to turn negative at -29.6 billion KRW, which includes an AMPC assumption of 467.3 billion KRW," and predicted, "Despite orders being lower than expected, inventory adjustments will also occur."

Despite the current poor performance, the recent stock price rebound has been steep.

The two researchers explained, "This is based on the supply and demand structure of the capital market and the expectation that, if the rebound succeeds, mid- to long-term growth can continue based on a large order backlog," but noted, "However, it is too early to conclude that the industry conditions will improve in 2025."

They added, "The key indicator explaining the parts industry condition is not simply an increase in shipment volume (Q), but the resolution of supply-demand discrepancies," and further stated, "If future investments and new line operations are delayed, the effect of supply reduction may appear, which could positively impact profitability improvement."

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