KB Securities, one of Korea's largest brokerages, raised its price target on LG Chem (051910.KS) — Korea's biggest chemicals maker and parent of battery subsidiary LG Energy Solution — to ₩470,000 ($343) from ₩430,000 ($314) on June 5, keeping its Buy rating. The number that matters is not the target itself but the forecast underneath it: analyst Jeon Woo-je projects second-quarter operating profit of ₩610.7 billion ($446 million), which KB says runs roughly 97% above market consensus and reverses a first-quarter operating loss of ₩49.7 billion ($36 million), per KB's note.
That is the question a portfolio manager will press on first: is a swing of more than ₩660 billion in a single quarter credible, or is this one bullish broker reaching? KB builds the case on two segments turning at once.
Where the recovery is supposed to come from
On the chemical side, KB points to firming prices for high-value resins — including ABS (acrylonitrile butadiene styrene, an engineering plastic) and synthetic rubber — since April, and to naphtha-cracker economics rebounding. As of June 1, the spread on a naphtha cracking center (NCC, the unit that turns naphtha into base petrochemicals) had recovered to about $379 per ton, a four-year high, according to KB's report as relayed by Maeil Business Newspaper and Hankyung.
On the battery side, KB expects LG Energy Solution, LG Chem's listed battery subsidiary, to improve on expanding orders for energy-storage-system (ESS) cells and 46-series cylindrical batteries, with cathode-material shipments normalizing as North American EV production adjustments wind down — a tailwind KB sees building from the second half of 2026 (KB via buffettlab.co.kr).
Those claims sit against a weak first quarter. LG Chem swung to a ₩49.7 billion operating loss in Q1 2026 from an operating profit of ₩437.7 billion ($320 million) a year earlier, on revenue of ₩12.25 trillion ($8.9 billion), down 2.6% year on year, the company reported (Seoul Economic Daily, AJU Press). The drag was concentrated in batteries: LG Energy Solution posted a ₩207.8 billion ($152 million) operating loss on ₩6.56 trillion ($4.8 billion) of revenue, hit by ESS ramp-up costs and softer North American EV pouch-cell volumes. The petrochemical division stayed profitable, with ₩164.8 billion ($120 million) of operating profit on ₩4.47 trillion ($3.3 billion) of sales, while the advanced-materials unit narrowed its loss to ₩43.3 billion ($32 million) on ₩843.1 billion ($615 million) of revenue (Seoul Economic Daily).
Sizing the call
For the full year, KB models operating profit of ₩1.7 trillion ($1.24 billion) in 2026 and ₩5.2 trillion ($3.8 billion) in 2027, which it puts ₩200 billion ($146 million) and ₩1.1 trillion ($803 million) above consensus, respectively (Maeil Business Newspaper). Against a market capitalization of roughly ₩33 trillion ($24 billion), based on KRX market data, the 2027 figure implies a sharp re-rating if it lands — which is precisely why the consensus gap is the live debate.
KB is not alone in turning more constructive. Samsung Securities upgraded LG Chem to Buy with a ₩500,000 ($365) target on May 4 (MarketScreener). The ₩470,000 target sits about 33% above the ₩352,000 ($257) reference price cited in KB's own note.
What confirms or refutes it
The thesis is a bet on cyclical timing, and it resolves on a date: LG Chem's second-quarter results, due in late July. The single cleanest test is whether reported Q2 operating profit lands anywhere near KB's ₩610.7 billion against a consensus that is far lower — and whether the NCC margin that KB flags at a four-year high holds rather than fades as a one-off. Until then, the chemical recovery rests on spot spreads that can reverse within weeks, and the battery turn depends on EV demand that produced the Q1 loss in the first place.
This article is for informational purposes only and does not constitute investment advice. Figures are sourced from company disclosures and brokerage research as cited; currency conversions use an approximate rate of 1 USD = 1,370 KRW.
