Shinhan Financial Investment maintained the target price of LG Chem at 1.33 million won and its investment opinion of 'Buy'.
LG Energy Solution, a 100% subsidiary of LG Chem, resolved business uncertainties by concluding battery-related disputes with SK Innovation. It is also expected to improve its performance by expanding its battery business in the U.S. in the future.
LG Energy Solution announced on November 11 that it will end lawsuits related to electric vehicle batteries with SK Innovation. As a result, SK Innovation will receive 2 trillion won in settlement money, including 1 trillion won in cash and 1 trillion won in royalties.
The LG energy solution is expected to expand its battery business in the region thanks to the U.S. government's plan to foster electric vehicles.
Electric vehicle infrastructure is known to account for $170 billion in large-scale stimulus measures announced by US President Joe Biden on March 31. In line with this, LG Energy Solution has invested $ 4.5 billion in the United States over the next five years to secure 75GWh production capacity.
LG Chem is expected to generate 39.223 trillion won in consolidated sales and 3.805 trillion won in operating profit in 2021. Compared to 2020 performance, sales increased by 28.8% and operating profit increased by 59.6%.
Reporter Lee Dong-hoon usinvestmentidea2020@gmail.com
