1、EQUITY:CHEMICALSLG Energy Solution 373220.KS 373220 KSGlobal Markets Research30 April 2025Our preferred stock in battery space1Q25 in line;expect 2Q25F revenue to decline 12%q-q on weaker shipments and ASP Maintain Buy;adjusting strategies to adapt to the evolving battery industry environmentWe expe

2、ct LG Energy Solution(LGES)to post revenue/operating profit growth of 5.5%/170.1%y-y in 2025F,reaching KRW27tn/KRW1.6tn,led by rising shipments to North America and Europe across electric vehicle(EV)and energy storage system(ESS)applications.In the 1Q25 earnings call,management guided for a cautious

3、 2Q25E operating environment due to weak utilization at its Poland plant(86GWh capacity)and softer shipment momentum from North American EV customers.Currently,we estimate Korean batteries will be levied a US import tariff of 25%from July vs 70%/150%for China EV/ESS batteries from May.However,Korean

4、 batteries may witness further cost escalations depending on the origin of the materials/components.Overall,we expect 2H25F EV shipments to rise vs 1H25 with the commissioning of new plants in the US/Canada for orders from Honda(7267 JP,Rating Suspended)and Stellantis(STLAM IM,Buy).In 1Q25,LGES guid

5、ed for North American shipments to increase to 45-50GWh in 2025E,from 30-35GWh in 2024.Upside risk:higher utilization in North America,Europe;downside risk:US policy Upside risks:(1)Higher utilization in Poland(partially converted lines to produce ESS);(2)wider gap between China and Korea battery im

6、port tariffs to the US;and(3)LGES potentially replacing Chinese ESS batteries in the US.Downside risks:(1)A potential removal of AMPC(45x)by the US can lead to a reduction in our cash flow forecast for LGES;(2)worse-than-expected US/Europe PHEV/EV sales,which may stem from global auto parts tariffs