"LG Energy Solution Expected to Win Large-Scale Orders in the Second Half...A Buying Opportunity"

[Financial News] NH Investment & Securities maintained its Buy rating and target price of 480,000 won for LG Energy Solution on the 15th, citing expectations for orders in the second half of the year.
Min-woo Ju, an analyst at NH Investment & Securities, said, "The stock has underperformed relatively because of the misconception that its energy storage system (ESS) order momentum is limited compared with competitors, but this is instead creating a buying opportunity. As a significant portion of this year's ESS order target is concentrated in the second half, large-scale orders are expected during the remaining period."
Ju added, "If Tesla's Full Self-Driving (FSD) system is approved in the vote expected to be held by the European Union's automotive technical committee (TCMV) on the 6th of next month, the sales forecast for Tesla could be raised, along with an upward revision to earnings from small-format batteries. European plant utilization is also recovering to above 60% as European customers begin selling facelift models in earnest."
LG Energy Solution's third-quarter revenue was forecast at 9.1 trillion won, with operating profit projected at 336.1 billion won. These figures exceed the consensus estimates of 8.9 trillion won in revenue and 290.6 billion won in operating profit.
Ju said, "The main reason earnings are expected to exceed consensus is that approximately 300 billion won in compensation for electric vehicle (EV) volumes will be reflected. Utilization at the Poland plant is recovering as European EV customers begin selling facelift models in earnest, and the company is expected to reach break-even in the fourth quarter."
He continued, "ESS profitability is expected to remain weak because bottlenecks in pack production will persist, but a return to profitability is expected in the fourth quarter as the bottlenecks are resolved. The 82-won decline in the average exchange rate during the third quarter is expected to affect operating profit by approximately 80 billion won."

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