[Market Focus] "Severe Discount," Says Activist Fund... LG Chem Surges Over 7%

On October 22, LG Chem showed strong performance in early trading. This comes as activist fund Pellicer Capital presented a plan to enhance corporate value, including improvements to the board composition, in order to address the discount on LG Chem's stock.

As of 9:33 a.m. on this day, LG Chem was trading at 372,500 won, up 26,500 won (7.66%) from the previous trading day.

This is because activist fund Pellicer Capital has determined that LG Chem's stock is significantly undervalued and has made specific proposals. Typically, when an activist fund calls for improvements in a company's governance structure or stronger shareholder return policies, expectations for increased shareholder value are reflected in the stock price, leading to a rise. Pellicer Capital holds more than a 1% stake in LG Chem.

On October 21 (local time), Pellicer Capital announced its recommendations for addressing LG Chem's discount at the "2025 Active-Passive Investor Summit" held in New York, USA.

Pellicer Capital emphasized that a total of four measures are necessary: ▲ improving the composition of the board and restructuring executive compensation to align with shareholder interests; ▲ implementing a robust capital allocation system focused on returns; ▲ conducting share buybacks using the company's stake in LG Energy Solution; and ▲ establishing an ongoing, long-term discount management program without a set deadline.

The reason Pellicer Capital made these proposals is because it believes LG Chem's stock is severely undervalued. In its presentation materials, Pellicer Capital assessed that LG Chem's share price is at the lowest level among major domestic conglomerates, trading at a 74% discount.

Pellicer Capital also emphasized that, despite LG Chem holding a stake in LG Energy Solution, this fact is not adequately reflected in the company's share price.