[Special Stock] LG Ensol Hits 52-Week Low... Plunges Due to Industry Slump and Credit Rating Outlook Downgrade

Battery Leader LG Energy Solution Struggles Amid Industry Slump
Hybrid Cars Gain Spotlight Over EVs, Battery Demand Slows
Global Credit Agencies Downgrade LG Energy Solution's Credit Rating Outlook

LG Energy Solution has hit a 52-week low. It is truly a relentless plunge. The lowest price since its 2022 listing is also within reach. This appears to be influenced by sluggish industry conditions and a downgrade in credit rating outlook by a global credit rating agency.

As of 9:44 AM on the 29th, LG Energy Solution is trading at 355,500 KRW, down 1.25% (4,500 KRW) from the previous day. Early in the session, the price fell to 355,000 KRW, breaking the 52-week low of 355,500 KRW recorded on the 24th, before slightly rebounding. The all-time low of 352,000 KRW recorded in July 2022 is now also within reach.

As the leading battery stock, LG Energy Solution is struggling with weak industry conditions. It posted consolidated sales of 6.1287 trillion KRW and an operating profit of 157.3 billion KRW in the first quarter. These represent decreases of 29.9% and 75.2%, respectively, compared to the same period last year. The cause of this 'negative growth' is the sluggish electric vehicle market, which is the core revenue source for batteries. Concerns are spreading that the growth momentum will slow down. According to market research firm SNE Research, a total of 16.75 million electric vehicles are expected to be registered worldwide this year. This represents a 19.1% increase, lower than last year's 33.5%. Recently, hybrid cars have been gaining attention instead of electric vehicles.

Additionally, S&P Global downgraded LG Energy Solution’s credit rating outlook from 'stable' to 'negative' the day before. They explained, "LG Energy Solution’s position in the U.S. market is relatively stable due to high entry barriers, but it may take some time for the U.S. plant’s production expansion to fully offset the slowdown in other regions." They added, "If the decline in electric vehicle battery demand intensifies, U.S. government policy support weakens, or oversupply in petrochemicals continues causing further deterioration in financial indicators, the credit rating will be downgraded."