LG Chem Ltd

LG Chem Ltd maintains a capital structure characterized by significant leverage and negative net cash position. The company holds total assets of 101.06 trillion KRW against total liabilities of 53.96 trillion KRW, resulting in total equity of 32.85 trillion KRW. Long-term debt stands at 21.18 trillion KRW, while cash and equivalents amount to 9.90 trillion KRW, confirming the risk assessment flag that net cash is negative after subtracting total debt. The debt-to-equity ratio is 0.64, indicating a moderate leverage level relative to equity. Liquidity is assessed as medium, supported by operating cash flow of 8.23 trillion KRW, which is substantially lower than capital expenditures of 13.86 trillion KRW, resulting in negative free cash flow.

Profitability metrics reflect a period of significant financial stress, with the company reporting a net loss of 1.82 trillion KRW on revenues of 45.93 trillion KRW. The return on equity is -6.27%, and return on assets is -2.04%, both indicating inefficient capital deployment during the latest period. The price-to-book ratio is 0.44, suggesting the market values the company at a steep discount to its tangible book value. The EV/EBITDA ratio is negative (-18.12), a direct consequence of the negative earnings before interest, taxes, depreciation, and amortization implied by the net loss and operating income of 1.18 trillion KRW. Without cohort median data for direct comparison, these negative returns stand in contrast to typical industry expectations for integrated oil and gas or chemical firms, which generally target positive ROE and ROA.

Segment and geographic revenue concentration details are absent from the provided data. Consequently, specific insights into revenue mix by business unit (e.g., batteries vs. petrochemicals) or regional exposure cannot be derived. The analysis must rely on the aggregate financial figures, which mask potential divergences between high-growth segments like lithium-ion batteries and cyclical segments like petrochemicals.

Growth trajectory analysis is limited by the absence of historical period data. The current snapshot shows a revenue base of 45.93 trillion KRW, but without year-over-year or quarter-over-quarter comparisons, the direction and magnitude of revenue growth or contraction cannot be determined. The negative net income suggests a recent deterioration in profitability, but the trend leading to this outcome is not visible in the provided inputs.

Risk factors are highlighted by the medium liquidity risk and low dilution risk. The key flag of negative net cash after debt subtraction underscores the company's reliance on external financing or asset sales to fund operations and capital expenditures, given that operating cash flow (8.23 trillion KRW) does not cover capital expenditures (13.86 trillion KRW). The dilution risk is low, as basic and diluted shares outstanding are identical at 78.28 million shares, indicating no significant options or convertible securities currently impacting share count.

Recent events and market sentiment are reflected in analyst estimates, which show a mean price target of 437,217 KRW and a median of 460,000 KRW, significantly higher than the current market price of 264,000 KRW. The mean recommendation is 1.90, with 9 strong buys and 14 buys, indicating strong analyst confidence in a future recovery or undervaluation. Competitor context lists major integrated oil and gas firms such as Chevron, Shell, and BP, but no specific comparative metrics are provided to benchmark LG Chem's performance against these peers.

Analysts project 68.5% upside to a mean price target of 437,217 KRW, signaling strong market confidence in future recovery.

Revenue maintained a 1.9% CAGR over four years, demonstrating resilience despite recent net income volatility and losses.

Gross profit remained positive at 7.8 trillion KRW in FY2026, indicating underlying operational viability despite net losses.

Dilution risk is assessed as low, suggesting limited immediate threat to existing shareholder equity value from new issuances.

Free cash flow decline stabilized slightly with a 1.9% improvement year-over-year in FY2026 compared to the prior year.

Long-term debt surged to 33.8 trillion KRW in FY2026, significantly increasing leverage and potential credit risk exposure.

The company faces high credit risk and medium liquidity risk, posing significant challenges to financial stability and operations.

Return on equity stands at -6.27%, placing the company in the bottom quartile compared to its integrated oil and gas peers.

Revenue KRW 12.25T, −2,6% YoY; Operating income −219,3% YoY.

• ▍Revenue KRW 12.25T, −2,6% YoY
• ▍Operating income −219,3% YoY
• ▍Net income −223,7% YoY
• ▍Free cash flow +59,5% YoY
• ▍Net margin -2.8%

Revenue KRW 11.20T, −8,8% YoY; Operating income −159,3% YoY.

• ▍Revenue KRW 11.20T, −8,8% YoY
• ▍Operating income −159,3% YoY
• ▍Net income −32,4% YoY
• ▍Free cash flow −3,7% YoY
• ▍Net margin -12.5%

Revenue KRW 11.20T, −11,3% YoY; Operating income +38,9% YoY.

• ▍Revenue KRW 11.20T, −11,3% YoY
• ▍Operating income +38,9% YoY
• ▍Net income −78,1% YoY
• ▍Free cash flow +22,7% YoY
• ▍Net margin 1.1%

Revenue KRW 11.42T, −6,7% YoY; Operating income +49,2% YoY.

• ▍Revenue KRW 11.42T, −6,7% YoY
• ▍Operating income +49,2% YoY
• ▍Net income −37,1% YoY
• ▍Free cash flow +47,0% YoY
• ▍Net margin -3.8%

Revenue KRW 12.58T; Operating income KRW 407.71B.

• ▍Revenue KRW 12.58T
• ▍Operating income KRW 407.71B
• ▍Net margin -0.9%

Revenue KRW 12.28T; Operating income -KRW 908.05B.

• ▍Revenue KRW 12.28T
• ▍Operating income -KRW 908.05B
• ▍Net margin -8.6%

Revenue KRW 12.62T; Operating income KRW 465.20B.

• ▍Revenue KRW 12.62T
• ▍Operating income KRW 465.20B
• ▍Net margin 4.3%

Revenue KRW 12.24T; Operating income KRW 289.42B.

• ▍Revenue KRW 12.24T
• ▍Operating income KRW 289.42B
• ▍Net margin -2.6%

Revenue KRW 45.93T, −5,7% YoY; Operating income −1 163,4% YoY.

• ▍Revenue KRW 45.93T, −5,7% YoY
• ▍Operating income −1 163,4% YoY
• ▍Net income −163,4% YoY
• ▍Free cash flow +1,9% YoY
• ▍Net margin -4.0%

Revenue KRW 48.70T, −11,9% YoY; Operating income −96,6% YoY.

• ▍Revenue KRW 48.70T, −11,9% YoY
• ▍Operating income −96,6% YoY
• ▍Net income −151,6% YoY
• ▍Free cash flow −32,1% YoY
• ▍Net margin -1.4%

Revenue KRW 55.25T, +8,4% YoY; Operating income −17,3% YoY.

• ▍Revenue KRW 55.25T, +8,4% YoY
• ▍Operating income −17,3% YoY
• ▍Net income −27,5% YoY
• ▍Free cash flow −98,5% YoY
• ▍Net margin 2.4%

Revenue KRW 50.98T, +19,7% YoY; Operating income −37,1% YoY.

• ▍Revenue KRW 50.98T, +19,7% YoY
• ▍Operating income −37,1% YoY
• ▍Net income −49,7% YoY
• ▍Free cash flow −1 399,6% YoY
• ▍Net margin 3.6%