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Photo courtesy of Yonhap News |
[Alpha Biz= Paul Lee] Seoul, South Korea — July 29, 2025 — Mirae Asset Securities has upgraded its target price for LG Energy Solution by 26%, from ₩420,000 to ₩530,000, citing the need for a reassessment of the company’s energy storage system (ESS) business amid shifting industry dynamics.
In a report released Tuesday, analyst Kim Cheol-joong projected the ESS division’s operating profit margin to reach 21% in 2026 and 24% in 2027 when factoring in the U.S. Advanced Manufacturing Production Credit (AMPC) under the Inflation Reduction Act (IRA). He noted that even under conservative assumptions of weaker U.S. electric vehicle (EV) demand, LG Energy Solution’s ESS-driven earnings potential could lead to upward revisions of the company’s overall profit outlook.
Kim also emphasized that U.S. tariffs and the “One Big Beautiful Bill Act” (OBBBA) are limiting the entry of Chinese competitors, strengthening the case for revaluing LG Energy Solution’s ESS operations and business value.
He compared the current trajectory of the secondary battery sector to that of the semiconductor industry in early 2023, when legacy product supply shrank and the profitability of high-bandwidth memory (HBM) began driving a rebound out of the downcycle.
Kim added that with China now signaling potential supply adjustments and ESS revenue and profit contributions rising in North America, the industry appears to be entering a similar inflection point. “While recalibrating EV demand assumptions is necessary, this is also a moment to consider the broader cycle transition for the sector,” he said.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
