LX International is showing strong performance. As POSCO International surged to the upper price limit, interest in the secondary battery raw material business of domestic trading companies appears to have increased.
At 1:01 PM on the 24th, LX International was trading at 40,300 KRW, up 13.2% from the previous trading day.
While POSCO International has risen more than 190% this year, LX International has increased by 17%. The Yeouido securities market expects LX International to break away from undervaluation as it pursues new resource-related businesses.
LG Energy Solution, LG Chem, LX International, POSCO Holdings, and China's Huayou Cobalt have formed a consortium to promote a large-scale project in Indonesia. The LG consortium plans to invest approximately 11 trillion KRW to build a complete value chain in Indonesia, covering mining, refining, precursor, cathode material, and cell production. Each company is reportedly responsible for different parts of the business: mineral supply (LX International), battery raw materials (LG Chem, POSCO Holdings, Huayou), and finished battery products (LG Energy Solution).
Lee Sang-heon, a researcher at Hi Investment & Securities, explained, "The grand package project covers all stages in the electric vehicle battery sector, including nickel mining, refinery construction, battery material production, cell production, and used battery recycling." He added, "The total project scale is $9.8 billion, implemented over four stages: investment in nickel ore mining, processing nickel ore into nickel sulfate, precursor and cathode material production, and battery cell production." He continued, "Investment and value chain construction in the battery industry, from mineral mining to cell production, are expected to become visible. Within the value chain, LX International is expected to handle mineral supply and related activities."
LX International plans to build a nickel mine locally and then export the materials to corporations with cathode material plants in the U.S. or Korea. This plan considers that cathode materials produced in the U.S. or countries with Free Trade Agreements (FTA) with the U.S. can receive subsidies under the U.S. Inflation Reduction Act (IRA). LX International also plans to invest in lithium.
Choi Min-woo, a researcher at Shinhan Investment Corp., said, "In the second half of this year, investment in Indonesian nickel assets is expected to become visible," and added, "It is highly likely that investments in nickel mines and refineries will be made together." He also noted, "Nickel ore mined in Indonesia has been subject to export bans by the Indonesian government since 2020, so it can only be exported after undergoing refining. Past experience in developing large coal mines in Indonesia is expected to positively influence nickel mine development and acquisition."
Choi added, "LX International is currently valued low. If news related to nickel asset investments emerges, the stock price could rise similarly to when the GAM mine investment was announced in 2012."
Ha In-hwan, a researcher at KB Securities, said, "Profitability improvements for POSCO International and LX International are expected," and added, "LX International has been pursuing new businesses through corporate acquisitions since the end of last year."
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