[Click eStock] "LG Energy Solution, Q1 Low... Rapid Growth Expected in Cylindrical Batteries"

On the 17th, visitors attending 'InterBattery 2022' held at COEX in Samseong-dong, Gangnam-gu, Seoul, are touring the LG Energy Solution exhibition hall. Photo by Hyunmin Kim kimhyun81@

[Asia Economy Reporter Hwang Yoon-joo] Hyundai Motor Securities maintained a 'Buy' rating and a target price of 640,000 KRW for LG Energy Solution on the 31st, expecting strong first-quarter earnings and rapid growth in the cylindrical battery business.

Kang Dong-jin, a researcher at Hyundai Motor Securities, stated, "We expect the first-quarter earnings this year to show solid results in line with consensus, with sales of 4.3 trillion KRW (-3.4% qoq, +0.8% yoy) and operating profit of 156.8 billion KRW (+44.8% qoq, -54.0% yoy)."

Researcher Kang explained, "We had anticipated underwhelming performance due to weak profitability in automotive pouch batteries caused by semiconductor supply issues, but the strong performance of cylindrical batteries offset this."

He added, "The launch of competitive new electric vehicles (EVs) is expected to increase battery plant utilization rates, leading to improved profitability. LG Energy Solution's earnings are seasonally lowest in the first quarter and are expected to improve each quarter."

He continued, "With the operation of the U.S. plant in 2023, market share is expected to expand," and assessed, "As the sales proportion of market-leading EV companies increases further, there is sufficient premium factor compared to CATL."