"LG Energy Solution Seen as the Biggest Beneficiary of U.S. ESS Localization" [Click e-Stock]

Yuanta Expects Upward Earnings Trend

On June 25, Yuanta Securities maintained its "Buy" investment rating and target price of 574,000 won for LG Energy Solution.

Anna Lee, a researcher at Yuanta Securities, stated, "Following the second quarter, LG Energy Solution is expected to see continued growth in energy storage system (ESS) shipments and recognize deferred compensation in the third quarter." She added, "In the fourth quarter, an increase in the operating rate of battery energy storage systems (BESS) in North America and greater improvement focused on electric vehicles (EVs) in Europe are anticipated."

Lee predicted that the company's second-quarter results this year would meet market expectations. Specifically, she forecast revenue of 7.3 trillion won and operating profit of 130 billion won. This represents a 31% increase in revenue and a 74% decrease in operating profit compared to the previous year. She explained, "Although the operating rate for EVs remains low, the growth in demand for small cylindrical batteries and ESS is driving these results." She also noted, "There is a high possibility that the recognition of compensation from original equipment manufacturing (OEM) companies, which the market is anticipating, will be delayed to the second half of the year."

However, she projected that performance related to EVs would improve from the second half of the year, and that the surge in BESS demand would further support results. She said, "From the second half, a recovery in certain GM models, the initial supply effect of the Rivian R2, the impact of the new 4695 cylindrical batteries in Arizona starting in 2027, and the recovery in operating rates focused on mid-nickel in Europe will drive rapid performance improvement." She added, "In addition, a surge in BESS demand due to power infrastructure bottlenecks in the United States will further boost order momentum and overall performance."

This content was produced with the assistance of AI translation services.