[Market Focus] "A Breather Is Needed"... LIG Nex1 Drops Over 14%

On August 8, LIG Nex1 shares are plunging. This is due to the high valuation burden, which has led securities firms to unanimously downgrade their investment ratings to 'neutral'.

As of 10:06 a.m. on this day, LIG Nex1 is trading at 517,000 won, down 86,000 won (14.26%) from the previous trading day.

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LIG Nex1 announced the previous day that its consolidated operating profit for the second quarter of this year was provisionally tallied at 77.6 billion won, up 57.9% from the same period last year.

Although the company posted solid results, they fell short of market expectations. As a result, LIG Nex1 shares were at one point traded at 545,000 won in after-hours trading, down 6.6%.

Securities firms have issued a flurry of reports downgrading their investment ratings from 'buy' to 'neutral.' DB Securities, Mirae Asset Securities, LS Securities, Daol Investment & Securities, and Samsung Securities all gave neutral ratings.

Han Youngsoo, a researcher at Samsung Securities, explained, "Expectations for future growth remain valid, but the recent sharp rise in the share price has already partially reflected these growth expectations in the valuation. Therefore, we are downgrading our investment rating to HOLD (neutral) due to the reduced short-term upside potential."

Kyobo Securities maintained its 'buy' rating and raised its target price to 700,000 won. Ahn Yudong, a researcher at Kyobo Securities, commented, "Given this year's and next year's results, we believe that improved profitability driven by a higher export ratio is inevitable. Ultimately, it is only a matter of time."

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