LG Chem set for double-digit growth in 2008 - bank

14 February 2008 09:53  [Source: ICIS news]

MUMBAI (ICIS news)--JP Morgan expects LG Chem to post a 16% rise in sales and a 32% year-on-year increase in net income for 2008, mainly due to cost savings achieved by last year's merger with affiliate LG Petrochemical, continued strength in downstream petrochemicals and the improved performance of its battery business, the bank said on Thursday.

JP Morgan maintained its “overweight” rating on South Korea's biggest chemical maker and a price target of won (W) 94,000 ($99.43), adding that its 2007 results were in line with expectations.

There would be a slight decline in petrochemicals operating margins due to expected pressure on ethylene margins in the second half of 2008, the bank added.

“We feel investors are no longer willing to pay a higher premium for petrochemical stocks as Middle East ethylene capacity will be added near the end of this year,” it said.

Main risks to the company’s forecast include new capacity in the Middle East coming on stream earlier than expected and lower battery utilisations, JP Morgan added.

($1 = W945.3)

By: Isha Jha
+65 6780 4359

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