LG Chem Ltd.

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Company Background

LG Chem is a leading chemical company in South Korea. Its origins can be traced back to Lucky Chemical Industrial, founded in 1947, of the LG group. LG Chem started as a producer of materials for cosmetics and has grown to become the pillar of the LG group, surpassing LG Electronics in terms of both market capitalization and earnings.

The LG group has shifted to a holding company system and LG Chem's biggest shareholder is LG Corp. While LG Chem is managed by a top executive who has risen within the company, key decisions such as changes in the top management and large acquisition deals are considered by LG Corp. Chairman Koo Bon-moo, owner and manager of the group.

LG Chem chalks up the majority of its sales from the petrochemical division, which has ethylene plants and produces products such as superabsorbent polymers used to make paper diapers and sanitary goods.

The lithium-ion battery business is also drawing attention as a locomotive of LG Chem's growth. The company supplies batteries for electric cars and hybrids to many automakers in the U.S., Europe and China, including Daimler of Germany and Great Wall Motor. It also engages in joint battery development. In addition, LG Chem handles electronic components such as polarizers for liquid crystal display panels.

Business Summary

LG Chem Ltd. manufactures petrochemicals, IT & electronic materials and energy solution materials. It operates through through the following business segments: Petrochemicals, IT & Electronic Materials, Batteries. The Petrochemical division offers naphtha cracking centers and polyolefins, synthetic rubbers and specialty polymers, polyvinyl chloride, acrylonitrile-butadiene-styrene and engineering plastics, acrylates and plasticizers. The IT & Electronic Material division provides optical and display materials namely polarizers, phosphors, organic light emitting diode, photosensitive materials for liquid crystal display; printed circuit materials such as flexible materials, halogen free materials, integrated circuit packaging materials, epoxy resin system materials, high speed materials and build-up materials; toners such as color toners, black laser printer toners and black copier toners. The Battery division provides lithium-ion cylindrical batteries, lithium-ion polymer batteries, lithium-ion prismatic batteries, medium and large batteries. The company was founded in January 1947 and is headquartered in Seoul, South Korea.

Financial Highlights

Dec 2018	KRW	USD
Revenue	28,183.01B	25,608.86M
Gross Profit	5,144.42B	4,674.54M
Operating income	2,246.07B	2,040.92M
Income before tax	1,940.04B	1,762.84M
Net income	1,472.60B	1,338.10M
EBITDA	3,733.33B	3,392.34M
Diluted EPS	19,061.98	17.32
Dividends Per Share	6,000	5.45
Total Assets	28,944.13B	25,940.25M
Total liabilities	11,622.00B	10,415.85M
Total equity	17,083.04B	15,310.13M
Operating cash flow	2,124.96B	1,930.88M
	Currency in KRW	Currency in USD

Historical Data

KRW | USD

	Dec 2014	Dec 2015	Dec 2016	Dec 2017	Dec 2018
Revenue	22,577.83B	20,206.58B	20,659.29B	25,698.01B	28,183.01B
Gross Profit	2,955.47B	3,609.35B	3,937.73B	5,455.48B	5,144.42B
Operating income	1,310.76B	1,823.56B	1,991.92B	2,928.45B	2,246.07B
Income before tax	1,159.86B	1,549.64B	1,659.82B	2,563.89B	1,940.04B
Net income	867,924M	1,152.98B	1,281.12B	1,945.28B	1,472.60B
EBITDA	2,461.21B	3,079.65B	3,328.61B	4,334.08B	3,733.33B
Diluted EPS	11,803	15,679	17,422	25,391	19,061.98
Dividends Per Share	4,000	4,500	5,000	6,000	6,000
Total Assets	18,127.64B	18,578.72B	20,487.06B	25,041.22B	28,944.13B
Total liabilities	5,861.79B	5,475.20B	6,436.09B	8,702.64B	11,622.00B
Total equity	12,139.94B	12,991.46B	13,937.35B	16,168.52B	17,083.04B
Operating cash flow	1,996.63B	3,171.58B	2,518.10B	3,182.86B	2,124.96B

	Dec 2014	Dec 2015	Dec 2016	Dec 2017	Dec 2018
Revenue	21,448.39M	17,853.43M	17,806.82M	22,731.34M	25,608.86M
Gross Profit	2,807.62M	3,189.03M	3,394.04M	4,825.68M	4,674.54M
Operating income	1,245.19M	1,611.20M	1,716.89M	2,590.38M	2,040.92M
Income before tax	1,101.83M	1,369.18M	1,430.65M	2,267.90M	1,762.84M
Net income	824.50M	1,018.71M	1,104.23M	1,720.70M	1,338.10M
EBITDA	2,338.09M	2,721.01M	2,869.02M	3,833.73M	3,392.34M
Diluted EPS	11.21	13.85	15.01	22.45	17.32
Dividends Per Share	3.79	3.97	4.30	5.30	5.45
Total Assets	16,492.42M	15,844.72M	16,962.29M	23,390.98M	25,940.25M
Total liabilities	5,333.02M	4,669.48M	5,328.77M	8,129.13M	10,415.85M
Total equity	11,044.84M	11,079.66M	11,539.45M	15,103.00M	15,310.13M
Operating cash flow	1,896.75M	2,802.23M	2,170.42M	2,815.42M	1,930.88M

Valuation Measures

Dec 2018
PER	18.05
ROA	5.45%
ROE	8.85%
Operating margin	7.96%
Profit margin	5.22%

Key executives

Vice Chairman & Chief Executive Officer: Hak Cheol Shin
President: Okdong Son
Director, Chief Operating & Financial Officer: Ho-Young Jeong
CTO & President-Executive Board: Ki-Soo No
Managing Director: Hyang-Mok Lee

Shareholders

LG Corp. (33.3%)
National Pension Service of Korea (10.0%)
LG Chem Ltd. (2.3%)
The Vanguard Group, Inc. (1.7%)
Fidelity Management & Research Co. LLC (1.7%)
BlackRock Fund Advisors (1.5%)
Norges Bank Investment Management (1.0%)
Schroder Investment Management Ltd. (0.8%)
Samsung Asset Management Co., Ltd. (0.8%)
Aberdeen Asset Managers Ltd. (0.8%)

Contact Details

Website:http://www.lgchem.com
Address: LG Twin Tower, 128 Yeoui-daero, Seoul, 07336, South Korea
Phone: +82.2.3777.1114

Related Companies

LG Chem Ltd. /Pesticide Bus/
LG Chemical Tianjin Plant
Daejung Em Co., Ltd. /Cathode Material Bus/
LG Hausys Ltd. /Adhesive Film Div/
Nanjing LG Chem New Energy Battery Co. Ltd.
Ugimag Korea Co., Ltd.
Tianjin LG BOTIAN Chemical Co. Ltd.
LG Polycarbonate Ltd.
LG Chem Display Materials (Beijing) Co. Ltd.
Wuxi LG Chemical Co. Ltd.
LG Chem Ltd. (Japan)
LG Chemical (Guangzhou) Engineering Plastics Co. Ltd
LG Chem (Tianjin) Engineering Plastics Co. Ltd.
LG Chem HK Ltd.
Tianjin LG Bohai Chemical Co. Ltd.
LG Chem (Taiwan) Ltd.
LG Chem Poland SP zoo
LG-Dow Polycarbonate Ltd.
Ningbo LG Yongxing Chemical Co. Ltd.
LG Solar Energy, Inc.
LG Chem Trading Shanghai Co. Ltd.
LG Polymers India Pvt Ltd.
LG Chem Michigan, Inc.
Kolon Industries, Inc. /Super Absorbent Polymer Ops/
LG Chem America, Inc.
Uniseal, Inc.
Hyundai Petrochemical Corp.
LG Life Sciences, Ltd
LG NanoH2O, Inc.

Competitors

BASF SE
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Eastman Chemical Company
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Genexine, Inc.
Johnson Matthey Plc
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AK Holdings, Inc.
Formosa Chemicals & Fibre Corporation
OMNOVA Solutions Inc.
SHIN HEUNG ENERGY & ELECTRONICS Co., Ltd.
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Lotte Chemical Corp.
Oil Refineries Ltd.
CHENG MEI MATERIALS TECHNOLOGY CORPORATION
Electrovaya Inc.
CBAK Energy Technology, Inc.
Shandong Ruifeng Chemical Co., Ltd. Class A
USI Corporation
Paik Kwang Industrial Co., Ltd.
Formosa Petrochemical Corp
Revance Therapeutics, Inc.

Last Updated on 23 Jan, 2020