April 25, 2024

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[THE INVESTOR] LG Hausys will leap on the back of its acquisition of Composite Innovation International, said Korea Investment and Securities on Feb. 20.

The company announced on Feb. 17 that it is taking over a 51 percent stake in the Slovak motor parts maker which owns leading carbon fiber technology, a key lightweight material, and counts major car and aircraft manufacturers including BMW and Porsche as clients. 

The global market for lightweight materials for automobiles is worth 13 trillion won (US$11.29 billion) and is growing at a rate of over 10 percent a year, said analyst Lee Gyeong-ja. LG Hausys, whose auto-related sales account for 27 percent of its revenue, had to invest in the material, and the acquisition of C2i was a fast track to speedy growth, said the analyst. 

When the acquisition is complete, LG’s lightweight materials revenue will surge to over 60 billion won and its profit-loss structure will improve as well, said Lee, suggesting the company as the “most favorable” among the building materials industry and maintaining a 140,000 won target price. 

By Hwang You-mee (glamazon@heraldcorp.com)