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(Photo= Yonhap news) |
[Alpha Biz= Reporter Kim Jisun] On the 7th, Kiwoom Securities reported that LG Energy Solution's performance is recovering, but the pace is sluggish. They noted that factors such as exchange rates, decreased sales of small batteries, and lower-than-expected estimates for the U.S. Advanced Manufacturing Production Credit (AMPC) are likely to result in third and fourth-quarter earnings falling short of expectations.
Kiwoom Securities projected LG Energy Solution's operating profit for the third and fourth quarters at 341 billion KRW, which is approximately 20% below the market consensus estimate of 430 billion KRW.
The firm explained, "The dollar-to-won exchange rate has fallen more than initially expected, and small battery sales to Tesla did not meet projections." They added, "While the operating rate of the Poland plant has improved compared to the previous quarter, it remains at a low level, and we expect a slight decline in AMPC compared to the last quarter."
Kiwoom Securities indicated that the stock price may decline in the short term. Analyst Kwon noted, "Inventory adjustments at year-end, the possibility of downward guidance for AMPC, declines in average selling prices (ASP) due to falling metal prices, and exchange rate factors all pose short-term downside risks for performance. Therefore, it seems inevitable that annual performance estimates for 2024 will be revised downward following the third-quarter earnings announcement scheduled for the end of this month."
AlphaBIZ Kim Jisun(stockmk2020@alphabiz.co.kr)
