LG Chem (051910.KS): Battery margin to grow further on strong EV sales
- We expect 3Q17 results to be in line with consensus.
- Despite narrowing profits from Farm Hannong and the life science division, 3Q earnings likely held up
well thanks to the widening margins of basic materials and batteries.
- The battery margin is expected to improve further, driven by strong seasonality for ESS, an ASP hike of
small batteries, and growing sales of EV batteries. We expect the EV battery business to turn to the black
in 2H18.
- LG Chem remains our chemical sector top pick.
LG Chem is engaged in the business of chemicals and polymers, industrial materials and information and electronic materials. Co. provides polyvinyl chloride products, plasticizers, polyethylene compounds, acrylic acids, engineering plastics, elastomers and conductive resins. Co. also manufactures lithium-ion batteries, printed circuit materials, toner, photosensitive materials, and organic light-emitting diode (OLED) materials.
Hyundai Motor Investment & Securities is the investment banking arm of the Hyundai Motor Group. The company offers stock brokerage and advisory services; derivative products brokerage and advisory services; wrap account portfolio management services; and VIP wealth management and tax planning, institutional equities, derivatives, and futures brokerage services, as well as sells investment and institutional products. It also provides equity offering, ABS, real estate PF and real estate PF securitization, offshore SOC, structured financing, asset securitization, real estate sales, IPO advisory, and private equity fund and fund management services; and CMA/RP portfolio management and fixed income based investments, as well as involved in the issuance, management, and brokerage of OTC derivatives. In addition, the company offers research services, including macro economic forecasts and stock market outlook, industry overviews and forecasts, fixed income strategies, corporate credit analysis, and valuation analysis. Further, it offers a range of retirement and pension services for individuals and corporate members; portfolios and asset allocation consulting and marketing services; proposing retirement pension plans; contract and payment management services; pension plan advisory and actuarial services; and system development and implementation services, as well as operates call centers for retirement pension services, etc.
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