[Featured Stock] LG Chem Falls Over 5% on Q4 Loss Forecast

LG Chem is on a downward trend due to earnings that fall short of expectations for the second half of the year.

As of 9:23 a.m. on the 29th, LG Chem is trading at 321,000 KRW, down 18,000 KRW (5.31%) from the previous day. Although it rose more than 5% the day before, it has nearly given back the gains within a day.

It is interpreted that the negative impact stems from forecasts that earnings will fall short of market expectations in the fourth quarter as well as the third quarter. In the third quarter, LG Chem recorded sales of 12.7 trillion KRW, down 3.2% year-on-year, and operating profit of 498.4 billion KRW, down 42.1%. A deficit is expected in the fourth quarter. Youngkwang Choi, a researcher at NH Investment & Securities, said, "Following the third quarter, the fourth quarter will also fall short of consensus (average securities firm forecast)," adding, "Operating loss of 157.2 billion KRW is expected in the fourth quarter, significantly below the consensus operating profit forecast of 566.5 billion KRW."

Jiwon Wi, a researcher at Daishin Securities, explained, "A loss of 102.3 billion KRW is expected in the fourth quarter, turning to a deficit," and added, "The petrochemical sector is expected to return to profitability due to improved product spreads and lower maritime freight rates, but this is offset by a large deficit at LG Energy Solution." Daishin Securities lowered LG Chem's target stock price by 9.1% to 500,000 KRW, reflecting downward revisions to profit estimates for the petrochemical and advanced materials divisions.