[Click eStock] "LG Energy Solution, 1Q Earnings Expected to Decline"

[Asia Economy Reporter Park So-yeon] There are forecasts that LG Energy Solution's first-quarter performance this year will be somewhat sluggish due to the vehicle semiconductor shortage issue.

According to FN Guide on the 29th, Hyundai Motor Securities recently issued a report setting LG Energy Solution's target stock price at 640,000 KRW with a buy rating, expressing this view.

They predicted that performance will gradually recover in the second half of the year, recording a high operating profit margin in 2023. There are also positive long-term forecasts that economies of scale will be realized.

They analyzed that additional performance improvements are possible through business diversification such as battery-related services and power business.

Hyundai Motor Securities stated, "Concerns that LG Energy Solution's profitability is lower compared to CATL are excessive," adding, "EBITDA margin is more important."

They also said, "LG Energy Solution's market dominance is becoming stronger," and "The full-scale operation of the U.S. plant in 2023 and mass production of 4680 batteries are expected to be triggers."

Furthermore, they noted, "The profitability gap compared to CATL is rapidly narrowing," and "There is already little difference in EBITDA margin compared to CATL."

They forecast that the operating profit margin difference between the two companies in 2023 will be 5.9 percentage points, but the EBITDA margin difference will be only 3 percentage points. Hyundai Motor Securities explained, "This is because LG Energy Solution applies very conservative accounting." They added, "As we move into 2023, premium factors will gradually become more prominent," and "LG Energy Solution's dominance in the secondary battery industry, which is key to energy transition, will become even stronger."