LG Chem and LG Household & Health Care Hit Lowest Prices This Year... Multiple Stocks Reach 52-Week Lows

[Image source=Yonhap News]

[Asia Economy Reporter Lee Seon-ae] Stocks hitting their lowest prices this year are emerging one after another amid the sharp decline in the KOSPI and KOSDAQ indices.

According to the Korea Exchange on the 1st, LG Chem closed at 694,000 KRW, down 2.53% from the previous day, marking its lowest price in a year. Compared to the peak of 1,050,000 KRW on January 4, it has plunged 33.9%. Besides the market correction, the downward revision of target prices also had an impact. After LG Chem’s Q3 earnings announcement, three securities firms (Hana Financial, Shin Young, Heungkuk) lowered their target prices. The current average target price from securities firms is 1,100,000 KRW. On the 1st, the stock opened higher at 702,000 KRW due to rebound buying, but analysis suggests that a full rebound will likely occur only after the LG Energy Solution listing. This is based on the judgment that if electric vehicle production is disrupted from Q4 due to a shortage of automotive semiconductors, battery shipment volumes will be affected. Yoon Jae-sung, a researcher at Hana Financial Investment, said, "In the short term, it is necessary to confirm the semiconductor chip shortage issue from Q4 this year as it may affect battery shipment volumes and profitability. The trigger for future stock price increases will be the profitability improvement of Energy Solution."

Choi Goeun, a researcher at Korea Investment & Securities, said, "The uncertainty surrounding the recent recall incident has passed its peak, and now it is time to focus solely on the LG Energy Solution listing. Once the short-term supply and demand fluctuations around the listing are overcome, a revaluation of battery equity value and new growth momentum centered on advanced materials will follow."

LG Household & Health Care is also at its lowest price. The previous day’s closing price was 1,054,000 KRW, marking the lowest price this year. The stock price, which soared to 1,784,000 KRW on July 1, has plunged 40.9%. This level is similar to the lowest price of 1,045,000 KRW recorded on March 23 last year. On the 1st, it opened higher at 1,059,000 KRW, showing an early rise of over 1%, but the outlook remains bleak. The Q4 earnings are expected to be sluggish as well. Due to concerns that the industry slowdown may prolong, the target price for LG Household & Health Care, which approached the 2.3 million KRW level in the first half, has fallen to the 1.5 million KRW range. Meritz Securities lowered its target price from 1.7 million KRW to 1.6 million KRW, and NH Investment & Securities revised it down from 1.9 million KRW to 1.65 million KRW. However, there are also investment opinions that the current sharp price drop is excessive. Park Eun-jung, a researcher at Yuanta Securities, said, "Due to last year’s high base and China’s platform advertising regulations, we expected about 10% growth during this year’s Singles’ Day. The results exceeded expectations, showing solid demand, so the current stock price level is excessive."

On this day, many stocks hit 52-week lows during trading. It is notable that both the KOSPI and KOSDAQ markets were dominated by consumer goods stocks. This is due to investor sentiment that daily consumption recovery will be delayed amid the spread of the COVID-19 Omicron variant. In the KOSPI market, stocks such as Hite Jinro, Lotte Insurance, Daesang, Binggrae, Lotte Holdings, Green Cross Holdings, Hotel Shilla, Lotte Shopping, Kolmar Holdings, Hansol Home Deco, Shinsegae International, Kangwon Land, Hyundai Home Shopping, Hyundai Livart, Able C&C, Kolmar Korea, Orion, Air Busan, and Kyochon F&B were listed as 52-week low stocks. In the KOSDAQ market, stocks including Korea Alcohol, Seoul Pharma, Ilji Tech, Fantagio, Paradise, Joa Pharma, Cafe24, Appclon, Korea Center, Apro, and Neosem recorded 52-week lows.