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LG Energy Solution Ltd 373220

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Stock XKRX Rating as of
KRW 372,500.00 −6,000.00 (1.59%)
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As of Delayed Price Open
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Company Report

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Largest Korean Battery Producer Expanding in American Market; Positive Outlook Mostly Priced In

Vincent Sun

LG Energy Solution, or LGES, was spun off from LG Chemical’s battery subsidiary in December 2020 and listed on the Korea Exchange in January 2022. LG Chemical retains around an 82% share of LGES. The company is one of the top lithium-ion rechargeable battery suppliers globally. It is the third-largest global battery maker for electric vehicles, or EVs, with 14% share in the first half of 2023, according to SNE Research. The company’s customers include many leading automakers such as Tesla, General Motors, Volkswagen, and Hyundai.

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Price vs Fair Value

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373220 is trading at a 3% premium.
Price
KRW 378,500.04
Fair Value
KRW 211,888.00
Uncertainty
High
1-Star Price
KRW 271,748.00
5-Star Price
KRW 648,697.00
Economic Moat
Txscq
Capital Allocation
Wsytbhl

Bulls Say, Bears Say

Bulls

Owing to robust demand, the EV battery business will reach at least a high-single-digit operating margin near-term and continue to drive LGES' margin expansion.

Bears

The profitability of EV batteries doesn’t improve as expected because of price competition, heavy upfront costs, and lower production yields.

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Trading Information

Previous Close Price
KRW 378,500.00
Day Range
KRW 370,000.00–379,000.00
52-Week Range
KRW 358,000.00–620,000.00
Bid/Ask
KRW 372,000.00 / KRW 372,500.00
Market Cap
KRW 87.05 Tril
Volume/Avg
79,093 / 193,436

Key Statistics

Price/Earnings (Normalized)
58.10
Price/Sales
2.62
Dividend Yield (Trailing)
—
Dividend Yield (Forward)
—
Total Yield
—

Company Profile

LG Energy Solution, or LGES, is the third-largest battery maker for electric vehicles, or EVs, with about 14% global share in the first half of 2023, according to SNE Research. The EV battery segment is the largest revenue contributor, which accounted for close to 60% of total revenue in 2022. Besides EV batteries, LGES also manufactures batteries for mobility, mobile phones, laptops, electrical devices, and energy storage systems. The company was spun off from LG Chem’s battery division in December 2020 and listed on the Korea Exchange in January 2022. It has global manufacturing facilities in Korea, China, Poland and the United States. Key customers include General Motors, Tesla, Volkswagen, Hyundai Motors and Stellantis.
Sector
Industrials
Industry
Specialty Industrial Machinery
Stock Style Box
Large Growth
Total Number of Employees
11,793
Website
https://www.lgensol.com

Competitors

Valuation

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Metric
373220
300750
03931
Price/Earnings (Normalized)
 58.1017.2421.21
Price/Book Value
 4.384.240.62
Price/Sales
 2.621.780.80
Price/Cash Flow
 18.769.57—
Price/Earnings
373220
300750
03931

Financial Strength

Metric
373220
300750
03931
Quick Ratio
 0.98—0.62
Current Ratio
 1.57—1.01
Interest Coverage
 6.91—3.10
Quick Ratio
373220
300750
03931

Profitability

Metric
373220
300750
03931
Return on Assets (Normalized)
 4.70%6.13%1.07%
Return on Equity (Normalized)
 10.06%22.26%2.95%
Return on Invested Capital (Normalized)
 6.49%11.43%1.58%
Return on Assets
373220
300750
03931
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