(Photo = LG Energy Solution)

 

[Alpha Biz=(Chicago) Reporter Paul Lee] Daol Investment & Securities analyzed that LG Energy Solutions will continue to fall until the second quarter due to sluggish demand for electric vehicles (EV). The target stock price was 520,000 won and the investment opinion 'buy' (BUY) was maintained.

"Shipports are expected to rebound to a low point in the first quarter, but GM has a hill to lean on due to the sluggish launch of new models by European customers," Daol Investment & Securities said in a stock report on the 1st.

Daol Investment & Securities estimates that LG Energy Solution's first-quarter sales will fall 29% year-on-year to 6.2 trillion won and operating profit will fall 86.32% to 86.6 billion won over the same period, falling below market consensus.

"The result reflects the impact of the use of high-cost raw materials despite the drop in selling prices, the drop in shipments and the recent drop in raw material prices," Daol Investment & Securities said. "The Advanced Manufacturing Tax Credit (AMPC) under the U.S. Inflation Reduction Act (IRA) is expected to be able to receive KRW 153.6 billion, and other operating profit is expected to be minus KRW 67 billion, the first deficit since its listing."

By sector, in the mid- to large-sized EV battery sector, the average sales unit (ASP) will fall 7% from the previous quarter and shipments will fall 17%, with sales to reach KRW 3.9 trillion, down 22.4% from the previous quarter.

"In the end, confirmation of GM's EV sales will be the most important thing from the second quarter," said Daol Investment & Securities Co. "The change in earnings estimates will not be significant until this quarter, so we will maintain proper stock prices and investment opinions."

The estimated share price return ratio (PER) in 2024 is 80.1 times, the net asset value ratio (PBR) is 4.5 times, and the corporate value (EV/EBITDA) to pre-amortization operating profit is 20.2 times. The closing price of the previous trading day is 487,000 won, and the room to rise to the target stock price is 6.8%.

 

 

[ⓒ AlphaBIZ. 무단전재-재배포 금지]