Its operating profit from the sector next year will soar 352.1 percent on-year as it wins additional orders for medium to large-sized batteries, said analyst Lee Dong-wook.
The price of some products will rise and sales of premium small batteries will increase, while its investment in nickel sulfate company Chemco will raise metal self-sufficiency rate, forecast the analyst. Its medium and large-size battery factory in Poland will begin full operations next year and help boost its earnings, added Lee.
The petrochemical and life science divisions will further bolster the earnings momentum, according to the analyst.
LG Chem currently has no plans to build major cracking facilities but it will expand capacity for higher margin chemical products and cracker in Daesan, to maintain the upturn in profits, said Lee.
The life science department has not been a major contributor but will continue to grow in the long term, noted the analyst maintaining a “buy” recommendation.
By Hwang You-mee (firstname.lastname@example.org) LG Chem’s battery unit will see its profits jump next year, said Kiwoom Securities on Nov. 29, raising the target price to 580,000 won (US$535.35) from 450,000 won.