KOSPI · 373220 · Batteries · ₩LGES

LG Energy SolutionLG에너지솔루션

373220 · KOSPI · ₩LGES · LG에너지솔루션

₩382,500▲ ₩7,500 (2.00%)End-of-day · Oct 27, 2026 · End-of-day prices.

Trade

Sell Buy

Valuation model · Discounted cash flow (DCF)

We use a 5-year discounted cash flow: the value of the cash the business is expected to produce, in today's money.

Fair value per share

With these assumptions the model gives no positive value.

Enterprise value: −₩7.6T
Equity value: −₩37T
WACC: 7.1%

Model estimate based on the assumptions shown. Not a price target and not a buy or sell signal. This is not financial advice.

Why the model and the price differ

The model gives no positive value at these assumptions. What we can see:

To match today's price of ₩382,500, the model needs an operating margin of 41.2% every year (it uses 4.2%).
In the projection, spending on equipment, software and working capital takes most or all of the after-tax operating profit, so free cash flow is thin. Companies that invest heavily often look like this until spending slows.

Treat the model as a starting point: change the assumptions to the story you believe, and compare with the multiples check below.

Bear / Base / Bull

Bear: —
Base: —
Bull: —

Bear: revenue growth 3 points lower every year, EBIT margin 2 points lower, WACC 1 point higher. Bull: the opposite.

Assumptions

Cycle options

Start from

Preliminary results are the company's early announcement of a quarter's sales and operating profit, before the full report. Including them swaps that quarter in for the same quarter a year earlier.

Margin path

Every year uses the cycle-average margin (4.2%).

Revenue growth

Revenue growth, year 1-2.6%
How much sales grow that year, compared with the year before.
Default: the last 3 years' revenue growth (-2.6% a year, annual reports), fading to 3% by year 5.
Revenue growth, year 2-1.2%
How much sales grow that year, compared with the year before.
Default: the last 3 years' revenue growth (-2.6% a year, annual reports), fading to 3% by year 5.
Revenue growth, year 30.2%
How much sales grow that year, compared with the year before.
Default: the last 3 years' revenue growth (-2.6% a year, annual reports), fading to 3% by year 5.
Revenue growth, year 41.6%
How much sales grow that year, compared with the year before.
Default: the last 3 years' revenue growth (-2.6% a year, annual reports), fading to 3% by year 5.
Revenue growth, year 53%
How much sales grow that year, compared with the year before.
Default: the last 3 years' revenue growth (-2.6% a year, annual reports), fading to 3% by year 5.

Business

EBIT margin4.2%
Operating profit as a share of revenue.
Default: through-the-cycle average of the last 12 months and the last 5 annual reports' operating margins.
Tax rate27.5%
Share of operating profit paid as corporate tax.
Default: Korea's top corporate tax rate (25%) plus 10% local income tax.
Depreciation & amortisation33.3%
The non-cash cost of wearing out equipment, added back to cash flow (% of revenue).
Default: not in the statements, so 80% of capital spending (most spending replaces equipment that wears out).
Capital spending41.7%
Money spent on factories, equipment, software and other long-term assets (% of revenue).
Default: average of the last 3 annual reports (cash flow statements; equipment and intangibles).
Working capital13.2%
Stock and unpaid customer bills, less unpaid supplier bills, as a % of revenue. Each year's extra revenue ties up this much more cash.
Default: working capital (current assets less cash and deposits, minus current liabilities other than borrowings) as a share of revenue, averaged over the last 3 years.

Discount rate

Terminal growth2%
How fast cash flows keep growing every year after year 5.
Default: about Korea's long-run inflation plus real growth.
Risk-free rate4.03%
Yield on Korea's 10-year government bond: the return with almost no risk.
Default: Korea Treasury Bond 10-year yield on 2026-10-27.
Beta0.7
How much the share moves when the market moves: 1 means just like the market.
Default: 105 weeks of weekly returns against KOSPI (official index); raw beta 0.55, adjusted toward 1 and kept between 0.6 and 2.0.
Equity risk premium5.5%
The extra return investors want for owning shares instead of bonds.
Default: a typical premium for Korean shares.
Cost of debt (before tax)5.53%
The interest rate the company would pay to borrow.
Default: the 10-year yield plus a 1.5% credit spread.

Starting point

Revenue (TTM to H1 2026): ₩26T
Net debt (borrowings and leases − cash and deposits): ₩22T
+ Stakes and investments: ₩81B; Associates, long-term financial assets and deposits (book value)
− Minority interests: ₩7.9T
Shares: 234,000,000
Share price: ₩382,500
Market cap: ₩90T

TTM = trailing 12 months: the last four reported quarters added together. "TTM to H1 2026" is the 12 months up to the latest quarterly or half-year report (H1 = to the end of June). Year 1 grows from there.

Past years and projection

Grey columns are reported results from the annual reports (after-tax EBIT at the model's tax rate), so you can check the growth and margin assumptions against the past. Years 1–5 are the model.

	FY2023	FY2024	FY2025	Year 1	Year 2	Year 3	Year 4	Year 5
Revenue	₩34T	₩26T	₩24T	₩25T	₩25T	₩25T	₩25T	₩26T
Growth	31.8%	−24.1%	−7.6%	−2.6%	−1.2%	0.2%	1.6%	3.0%
EBIT	₩2.2T	₩575B	₩1.3T	₩1.1T	₩1T	₩1.1T	₩1.1T	₩1.1T
EBIT margin	6.4%	2.2%	5.7%	4.2%	4.2%	4.2%	4.2%	4.2%
After-tax EBIT	₩1.6T	₩417B	₩976B	₩770B	₩761B	₩762B	₩774B	₩798B
+ Depreciation	—	—	—	₩8.4T	₩8.3T	₩8.3T	₩8.5T	₩8.7T
− Capital spending	₩10T	₩13T	₩11T	₩11T	₩10T	₩10T	₩11T	₩11T
− Working capital	₩3T	−₩2.5T	₩2.7T	−₩89B	−₩40B	₩6.6B	₩53B	₩101B
Free cash flow	—	—	—	−₩1.3T	−₩1.3T	−₩1.3T	−₩1.4T	−₩1.5T
Discount factor	—	—	—	0.934	0.871	0.814	0.760	0.709
Present value	—	—	—	−₩1.2T	−₩1.1T	−₩1.1T	−₩1.1T	−₩1.1T

Terminal value −₩2.9T, worth −₩2T today: 27% of enterprise value. It assumes spending settles at 110% of depreciation once growth slows to the terminal rate.

Cross-check: what the market has paid before

For cyclical businesses, analysts check a DCF against the multiples the stock has traded at through past cycles. Price / book is the usual anchor for them: P/E looks highest at the bottom of a cycle, when earnings are smallest, and lowest at the top. The price each band would give today:

	Low	Typical	High
Price / book (book value ₩95,479 a share)Now 4.01×	₩352,5203.69×	₩440,9194.62×	₩681,1257.13×

Low, typical and high are the 10th percentile, middle and 90th percentile of month-end multiples since 2022, each against the latest report out by then, per share at today's share count; loss years and P/E above 100 are left out. Run-rate earnings are one quarter × 4, not a forecast. Model estimate based on the assumptions shown. Not a price target and not a buy or sell signal.

Sensitivity

Fair value per share as two inputs change; the middle is the current case.

WACC ↓ · Terminal growth →	1.0%	1.5%	2.0%	2.5%	3.0%
6.1%	—	—	—	—	—
6.6%	—	—	—	—	—
7.1%	—	—	—	—	—
7.6%	—	—	—	—	—
8.1%	—	—	—	—	—

Now (TTM)

Market cap: ₩90T
Enterprise value: ₩111T
P/E: —
P/B: 4.0×
P/S: 3.4×
EV/EBITDA: —
Dividend yield: 0.0%

Over time (at each year end)

	2025	2024	2023	2022
Price	₩368,500	₩348,000	₩427,500	₩435,500
Market cap	₩86T	₩81T	₩100T	₩102T
P/E	—	—	80.9×	132.8×
P/B	4.3×	3.9×	5.0×	5.4×
P/S	3.6×	3.2×	3.0×	4.0×
EV/EBITDA	—	—	—	—
Dividend yield	0.0%	—	—	—

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Versus similar companies

Company	P/E	P/B	P/S	EV/EBITDA	Dividend yield
LG Energy Solution	—	4.0×	3.4×	—	0.0%
Samsung SDI	1,087.4×	1.7×	2.9×	—	0.0%
POSCO Future M	320.4×	3.4×	5.0×	—	0.2%
Ecopro BM	211.6×	5.2×	4.0×	—	0.1%
L&F	—	4.4×	1.2×	15.2×	0.0%
DN Automotive	6.2×	1.0×	0.6×	—	2.4%
Ecopro Materials	29.3×	1.8×	4.0×	—	0.0%
Similar companies (median)	211.6×	2.6×	3.4×	15.2×	0.1%

Calculated from end-of-day prices and filed financial statements. Not a recommendation. This is not financial advice.

Also known as: LG Energy Solution / LG에너지솔루션 / 373220 / KRX:373220

Source: KRX statistical information