LG Chem: Loss-Making Trailing Year, Sub-1x Book Value, and Heavy Cash Burn

Thesis

The data shows a company whose scale is large but whose profitability has fallen sharply since 2021. Operating margin went from 11.8% in 2021 to 1.7% on a trailing basis, and net income has been negative since 2024. A price-to-book of 0.5x and a dividend yield of 3.5% point to a market valuing the company well below its accounting equity. The data does not show what is driving the losses or whether they will reverse. Free cash flow of -₩19.2T against cash of ₩11.1T and borrowings of ₩28.7T makes funding a key issue to watch. Share price returns are mixed: -4.6% over one month, 0.0% over three months and -6.6% over one year. A recent amended filing on a production suspension, and an exchange inquiry about a news report in August, add uncertainty, but the data gives no details on either.

Business overview

LG Chem is a KOSPI-listed chemicals company, founded on 2001-04-01 and listed on 2001-04-25, with 70,592,343 listed shares. CEO is 김동춘. Market capitalisation is about ₩18.4T and enterprise value about ₩36.0T. Revenue rose from ₩42.7T in 2021 to ₩51.9T in 2022 (+21.6%) and ₩55.2T in 2023 (+6.5%). It then fell to ₩48.9T in 2024 (-11.5%) and ₩45.9T in 2025 (-6.1%). The trailing figure of ₩48.8T as of H1 2026 suggests a partial recovery in sales. The data does not break revenue down by business segment.

Model estimate of fair value

The valuation model has no estimate for this company yet (not enough data, or no positive value with the base case).

Report history

1. Oct 28, 2026Update noteBuyback / dividend / value-upLG Chem signs ₩300B share buyback trust contract
2. Oct 13, 2026InitiationLG Chem: Loss-Making Trailing Year, Sub-1x Book Value, and Heavy Cash Burn