[Click eStock] "LG EnSol, AMPC Effect 5.8 Trillion by 2025... Target Price Up"

Daishin Securities on the 10th significantly raised the target price for LG Energy Solution from 660,000 KRW to 750,000 KRW.

LG Energy Solution's first-quarter sales are estimated at 8.7 trillion KRW, with an operating profit of 633.2 billion KRW. This represents a growth of 2 times and 2.5 times respectively compared to the same period last year. The figures also far exceeded market expectations.

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Sales increased significantly as EV battery sales to major clients such as Tesla, Volkswagen, and GM exceeded expectations. Above all, profitability greatly improved as approximately 100.3 billion KRW was reflected in operating profit due to the production tax credit (AMPC) under the U.S. Inflation Reduction Act (IRA). The total tax credit amount from AMPC is estimated to reach 5.8 trillion KRW cumulatively through 2025, including this year. It is expected to act as an additional positive factor, with the possibility of upward revision depending on the detailed guidelines of the legislation or increased sales volume within the U.S.

Jeon Chang-hyun, a researcher at Daishin Securities, said, "We considered the rapid scale expansion centered on North America and the significant profitability improvement due to the full reflection of AMPC. From the first quarter of this year, the effect of the AMPC tax credit is fully reflected, and we have significantly raised the operating profit estimates for 2023 to 2025."

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