LG Chem earns a large share of its revenue from petrochemicals, where it cracks naphtha to make plastics and basic chemical materials, and it adds advanced materials such as EV cathodes and semiconductor inputs plus a life-sciences arm. But the single most important pillar of the company's value is its roughly 82% stake in LG Energy Solution, the country's top battery maker, whose market value alone far exceeds LG Chem's entire market cap. Its Q1 2026 consolidated preliminary results showed an operating loss, and the company laid out a capital-reallocation plan to raise cash using its LG Energy Solution stake while gradually trimming that holding toward roughly 70% over about five years. The recent picture is two-sided: the strengths are a steep discount, with the market cap sitting well below the value of the stake it holds, and management's stated goal of narrowing that discount; the cautions are petrochemicals' long down-cycle, earnings volatility driven by the subsidiary's results, and the fact that the discount can only be confirmed once the plan is actually executed.
At-a-glance assessment financial health · growth · profitability · valuation
- Operating profit barely covers the interest bill (interest coverage below 1x).
- The most recent full-year net result was a loss.
- Revenue fell 5.7% year over year (3-year trend: falling).
- Most recent quarter (Q1 2026) revenue was 2.6% lower than a year earlier.
- ROE is -5.5% (controlling-interest basis). It is below the sector average.
- Operating margin is 2.6%.
- Valued against the net asset value (NAV) of its listed holdings rather than a consolidated P/E — see the in-depth valuation for the detailed basis.
Ownership & governance As of 2025-12-31
Largest shareholder LG Corp 31.52% (corporate)
Controlling bloc incl. related parties 31.55%
With the controlling bloc holding 32%, the ownership structure is stable.
Net asset value (NAV) assessment Fairly valued67% discount to NAV
💡 How to read a holding company · A holding company owns stakes in several subsidiaries. Its P/E swings with equity-method gains and losses on those stakes, so read it only as a rough guide. P/B is more meaningful because subsidiary stakes sit in equity, but book value carries them at low historical cost (so P/B looks higher than reality). The most accurate view is the price against the market value of those stakes (NAV) ↓
Valued against the net asset value (NAV) of its listed holdings rather than a consolidated P/E — see the in-depth valuation for the detailed basis.
Listed subsidiaries ownership
| LG Energy Solution | 79.38% |
🔎 In-depth analysis
- LG Chem makes money along four broad lines.
- The first is its traditional petrochemicals business, where it cracks naphtha refined from crude oil to make plastics, synthetic rubber, and various basic chemical materials (Q1 2026 revenue of roughly ₩4.47 trillion, its largest revenue share).
- The second is advanced materials, centered on cathodes for EV batteries and semiconductor inputs (Q1 revenue of about ₩843.1 billion).
- The third is life sciences (pharmaceuticals and diagnostics), small in scale but steadily profitable (Q1 revenue of about ₩312.6 billion).
- And the most important, fourth pillar is its roughly 82% stake in the subsidiary LG Energy Solution.
- LG Energy Solution is the country's top maker of EV battery cells, and the market value of this stake alone is more than three times LG Chem's entire market cap.
- In other words, LG Chem has two faces: it is both a chemicals company and a holding company that owns the country's leading battery stock.
- The recent closing price is ₩251,500 and the market cap is ₩17.8 trillion.
- The price sits below its 20-day moving average (₩303,125) and below its 60-day average (₩347,558).
- Trading below both its short- and medium-term moving averages, the trend is on the soft side.
- The RSI (a supporting gauge that scores the strength of gains versus losses over the past 14 days on a 0-100 scale) is 31.8, a neutral level.
- The one-month change is -22.1%, the three-month change is -22.3%, and the position relative to the 52-week high is -41.4%.
- Relative strength versus KOSPI is 19 (on a 1-99 scale that weights recent returns against the index over the past year more heavily; higher means stronger than the market).
- That places it near the top 82% of all stocks by strength.
- Over the past three months it lagged the index by 41.2%.
- It is best to read the chart alongside trading volume and the dates of disclosures.
- The headline numbers look poor.
- Because 2025 consolidated net profit was a loss of about ₩1.82 trillion, the P/E (how many times a year's earnings the price is worth) cannot be calculated, ROE (how much is earned in a year on equity) is -5.5%, the debt ratio (debt relative to equity) is about 164%, and the interest coverage ratio is below one time, leaving operating profit barely able to cover interest.
- However, much of this loss figure arises because the fully consolidated subsidiary LG Energy Solution is combined into the calculation, so when the battery market is weak, the parent's results are booked as a loss along with it.
- That is why LG Chem is hard to judge as cheap or expensive using only earnings- and book-based measures like P/E and P/B.
- Its P/B (how many times the book value of net assets the price is worth) is 0.58x, well below 1x, but this book equity carries the LG Energy Solution stake at its old, low acquisition cost, creating an illusion that makes it look smaller than its actual holding value.
- The key is the net asset value (NAV) of the holdings, explained later in the valuation and outlook sections.
- Five-year revenue ran ₩42.6T → ₩51.9T → ₩55.0T → ₩48.7T → ₩45.9T (2021-2025), a declining trend that peaked in 2023, and operating profit shrank sharply from ₩5.03T → ₩3.00T → ₩2.50T → ₩0.87T → ₩1.18T.
- This largely reflects the long down-cycle that petrochemicals entered after 2022.
- In Q1 2026, revenue was ₩12.25 trillion (-2.6% year on year) and operating profit was -₩4.97 billion, turning to a loss even at the operating level, while net profit was about -₩781.9 billion.
- That said, the Q1 operating loss includes one-off items such as inventory-timing losses from rising feedstock prices; the petrochemicals division actually posted an operating profit of about ₩16.48 billion in Q1, and the advanced-materials loss narrowed, with the company guiding advanced materials to turn profitable in Q2.
- On June 24, 2026, the company officially announced a plan to invest about ₩15 trillion in R&D through 2035, reduce the petrochemicals weighting, shift its center of gravity toward semiconductor, mobility, and robotics materials plus cancer drugs, and target a double-digit operating margin by 2030.
- In short, near-term earnings are in a cyclical trough, but a long-term transformation that reshapes the very composition of the business is under way.
- Recent disclosures and IR events fall into two threads.
- One relates to earnings and governance: the April 30, 2026 consolidated preliminary results (a Q1 operating loss), a run of investor briefings (IR) in April and May, a large-scale business-group status disclosure on June 1, and a corporate governance report disclosure in May.
- The other relates to asset and stake cleanup, with the May disclosures of a subsidiary's disposal of tangible assets and an asset transfer to a related party.
- In the bigger picture, the key variable is the company's capital-reallocation plan: over 2025-2026, using the LG Energy Solution stake as collateral or a means of exchange to raise cash, and gradually trimming its holding toward roughly 70% over about five years.
- This is a stock with clear strong and weak conditions.
- Strong case: the market cap (about ₩19.1 trillion) sits far below the value of the LG Energy Solution stake it holds (about ₩63 trillion), leaving the core chemicals and materials business effectively assigned a negative value in a deep discount.
- The company itself acknowledges a value gap of about ₩60 trillion and has set a goal of narrowing the discount (to 30-40%); if the battery market turns, or if a partial stake sale or expanded shareholder returns (restoring a 30% consolidated payout ratio, a 10% ROE target) actually proceed, there is room for the discount to close.
- Weak case: petrochemicals is in a long down-cycle amid structural oversupply, so core earnings recovery is slow; net profit swings with the subsidiary's results, creating large short-term earnings volatility; and closing the discount can only be confirmed once execution such as stake sales and shareholder returns follows.
- In a phrase, this is a stock whose core business is at a trough and whose value hinges on whether the NAV discount is resolved.
🔎 Valuation vs peers Inconclusive
In keeping with its true nature as a chemicals and materials parent that owns a battery-cell subsidiary, the peer set combines the top battery subsidiary (LG Energy Solution) with pure petrochemical firms (Lotte Chemical, SK Chemical), viewing its position through the lens of net asset value (NAV) rather than P/E.
| Peer | P/E | P/B | ROE |
|---|---|---|---|
| LG Energy Solution | 0.00x | 3.63x | -5.31% |
| Lotte Chemical | 0.00x | 0.21x | -16.19% |
| SK Chemicals | 15.81x | 0.31x | 1.98% |
(a) Position versus the true peer set: LG Chem's value is effectively driven by its LG Energy Solution stake (about ₩63 trillion), while its market cap (about ₩19.1 trillion) is less than one-third of that stake's value. In other words, the core chemicals business is valued at almost nothing, or even negatively. (b) Premium/discount: the discount (around 60-70%) exceeds the usual discount for a holding structure of this kind (30-50%), which is partly reasonable because the battery subsidiary itself trades on a high multiple (a P/B of 3.8x), pure petrochemicals is valued low in the down-cycle (Lotte Chemical at a P/B of 0.21x), and cashing out the stake would carry taxes and discounts. (c) Trailing limits and forward basis: the 2025 loss makes P/E meaningless, and the P/B also carries a book-value illusion, so earnings- and book-based measures make judgment hard. If the company's formalized stake sale (toward 70% over about five years) and expanded shareholder returns (restoring a 30% payout ratio, a 10% ROE target) are actually executed, there is room for the discount to narrow; but until execution, the verdict is split between 'undervalued' and 'a justified discount,' so we treat it as inconclusive.
Price history Close · MA20 · MA60
The latest close is ₩251,500 and the market capitalization is ₩17.8 trillion. The price sits below its 20-day moving average (₩303,125) and below its 60-day moving average (₩347,558). It is under both its short- and medium-term moving averages, so the trend looks subdued. The RSI (a supplementary indicator that gauges the strength of gains versus losses over the past 14 days on a 0-100 scale) is 31.8, a neutral level. The one-month change is -22.1%, the three-month change is -22.3%, and the position relative to the 52-week high is -41.4%. Relative strength versus the KOSPI is 19 (on a 1-99 scale, converted from returns against the index over the past year with more weight on recent performance; higher means stronger than the market). It is stronger than roughly 18% of all stocks. Over the past three months it lagged the index by 41.2%. Chart interpretation is best done alongside trading volume and the dates on which disclosures occur.
Relative performance stock vs index · start = 100
Excess return vs index · 3M -41.21% / 6M -52.49% / 12M -58.18%
Key metrics vs whole-market median
Valuation
A net loss makes the P/E an unreliable valuation gauge. The P/B of 0.54x is below the whole-market median (1.15x).
Enterprise value (EV)
EV = market cap + net debt. It reflects cash and debt, so it captures the real cost of the whole business that market cap alone misses; lower multiples are cheaper relative to earnings or sales.
Profitability & financials
Return on equity (ROE) is -5.5%, below the whole-market average (5.0%). The operating margin is 2.6%. The debt ratio is 164.3%, so the financial structure is moderate.
Growth FY2025 · annual report (consolidated)
| Item | 2023 | 2024 | 2025 | YoY |
|---|---|---|---|---|
| Revenue | $36.5B | $32.3B | $30.4B | -5.68% ↑ faster |
| Operating profit | $1.7B | $579.9M | $782.7M | +34.97% ↑ faster |
| Net profit | $886.7M | -$457.9M | -$1.2B | — |
| 5-year | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue | $28.2B | $34.4B | $36.5B | $32.3B | $30.4B |
| Operating profit | $3.3B | $2.0B | $1.7B | $579.9M | $782.7M |
| Net profit | $2.4B | $1.2B | $886.7M | -$457.9M | -$1.2B |
| Revenue CAGR | 4-yr avg 1.90% | ||||
Revenue fell 5.7% year over year (2023 ₩55.0 trillion → 2024 ₩48.7 trillion → 2025 ₩45.9 trillion), and the three-year trend is 'falling'. That said, the rate of decline narrowed from the prior year. Operating profit rose 35.0% year over year. Profit is growing at an accelerating pace. Over the 5 years on record, revenue compound annual growth (CAGR) is 1.9%. The two-year revenue CAGR is -8.6%. In the most recent quarter (Q1 2026), revenue was 2.6% lower than the same period a year earlier.
Latest quarterly results Q1 2026 · vs year-ago
Technical indicators
What stands out
- —
Points to watch
- Operating profit barely covers the interest bill (interest coverage below 1x).
- The most recent full-year net result was a loss.
- The most recent full year was a loss, so it is worth checking whether profitability recovers.
- Revenue fell 5.7% year over year (3-year trend: falling).
Recent news & events searched · sourced
- 2026-04-30EarningsQ1 2026 consolidated preliminary results disclosed — revenue of about ₩12.25 trillion and operating profit of -₩4.97 billion, turning to a loss at the operating level. Petrochemicals profitable; advanced-materials loss narrowed.Short term: a loss that includes one-off items (such as inventory timing) weighs on sentiment. Medium term: with the company guiding advanced materials to turn profitable in Q2, it is a checkpoint for the recovery path. Source
- 2026-06-24IRLong-term growth strategy announced — about ₩15 trillion in R&D through 2035, a reduced petrochemicals weighting, expansion into semiconductor/mobility/robotics materials and cancer drugs, and a double-digit operating-margin target by 2030.Medium to long term: clarifies the direction of shifting the business mix from chemicals to high-value materials. The pace of execution of the structural shift matters more than near-term earnings. Source
- 2026-06-01FilingLarge-scale business-group status disclosure — reporting the affiliate structure and stakes of subsidiaries including LG Energy Solution. Reconfirms the holding-style structure centered on subsidiary stakes.Medium term: stake-structure information that underpins a NAV-based (holding value) valuation view. A starting point for tracking stake sales and reallocation. Source
- 2026-05-26UpdateDecision to dispose of a subsidiary's tangible assets (correction) and an asset transfer to a related party — transactions aimed at cleaning up non-core assets and raising cash.Short term: helps ease cash-flow and financial pressure. Medium term: consistent with the direction of portfolio cleanup (reducing petrochemicals). Source
Figure cross-check computed ↔ external
| Metric | Computed | External | Status | Source |
|---|---|---|---|---|
| 2025 consolidated revenue | approx. ₩45.93 trillion | approx. ₩45.93 trillion | Confirmed | link |
| Q1 2026 operating profit | approx. -₩49.7 billion | approx. -₩49.7 billion | Confirmed | link |
| LG Energy Solution stake held | approx. 82% | approx. 82% | Unverified | link |
| Market cap versus net asset value (NAV) of holdings | LG approx. ₩63 trillion vs LG approx. ₩19.1 trillion | approx. ₩60 trillion , 30~40% | Unverified | link |
Recent filings
- 2026-06-01Large-business-group status disclosure
- 2026-05-29Corporate governance report
- 2026-05-29Disclosure
- 2026-05-26Disclosure
- 2026-05-26Amended filing
- 2026-05-14PeriodicQuarterly report
- 2026-05-14OwnershipLargest-shareholder ownership change report
- 2026-05-14OwnershipOfficers'/major-shareholders' holdings report
- 2026-05-06Disclosure
- 2026-04-30Disclosure
- 2026-04-30EarningsFair-disclosure notice
- 2026-04-29Amended filing
📖 Plain-language glossary — expand if you are new to this
- P/E
- How many times a year's net profit the price is worth (lower is cheaper relative to earnings). The P/E here is on trailing (last full-year) results; for companies whose earnings swing fast (memory chips and other cyclicals/high-growth), a forward P/E on this year's expected earnings is more accurate.
- P/B
- Price relative to net assets (equity). Around 1x means it trades near book value; below 1x means below book.
- P/S
- Price relative to a year's revenue — useful for growth companies with thin earnings.
- Net debt / EV
- Net debt = interest-bearing debt − cash. Negative means more cash than debt (net cash). EV (enterprise value) = market cap + net debt, closer to what it would cost to buy the whole business.
- EV/EBIT · EV/EBITDA · EV/Sales
- Enterprise value against operating profit (EBIT), EBITDA, or revenue. Unlike P/E these reflect debt and cash; lower is cheaper relative to earnings power or sales.
- FCF / FCF yield
- Free cash flow = operating cash − capex, the cash actually left over. FCF yield = FCF ÷ market cap; higher means more cash generated per unit of market value.
- Intrinsic value (DCF)
- Future free cash flow (or, for some capex-heavy but profitable names, forecast earnings) discounted to today to estimate per-share value. Because it shifts a lot with the discount-rate and growth assumptions, it is shown as a bear/base/bull range, and the basis and assumptions are disclosed in one line beneath it.
- ROE
- How much profit the company earns in a year on its equity (%). Higher means better returns on capital.
- EPS / BPS
- Earnings per share / net assets (book value) per share.
- Operating / net margin
- Profit left from the core business / final profit after tax and interest, per unit of revenue.
- Debt ratio
- Debt relative to equity (%). Higher means more reliance on borrowing (norms vary by sector).
- Current ratio
- Assets convertible to cash within a year against debt due within a year. Above 100% leaves some short-term headroom.
- Interest coverage
- How many times operating profit covers the interest owed. Below 1x means operating profit alone struggles to cover interest.
- Dividend yield / payout ratio
- The year's dividend as a % of today's price / the share of earnings paid out as dividends.
- Revenue CAGR
- Multi-year growth expressed as a single yearly average (compound annual growth rate).
- RSI (short-term signal)
- Whether recent price action is overheated or beaten down. Above 70 is overbought, below 30 oversold.
- MA20 / MA60 (moving averages)
- The 20- and 60-day average price. Price above them signals a firmer short-term trend.
- vs 52-week high
- How far below the past year's peak the price sits now (%).
All figures are for reference only; how they read varies by sector and over time.
Sources: Korea FSC market-price API (data.go.kr), OpenDART, KRX/KIND — public data only.
Bong Stocks presents public-data-based information for reference only. It is not investment advice and contains no target prices, ratings, or buy/sell recommendations. Verify independently before making any decision.