[Edaily Reporter Park Jung-Soo ] On the 30th, iM Securities projected that LG Energy Solution(373220)would see rapid growth in its energy storage system (ESS) business. The firm maintained its “Buy” rating and target price of 620,000 won.
Jeong Won-seok, an analyst at iM Securities, stated, “A marked improvement in earnings is expected in the second quarter, driven primarily by ESS and cylindrical batteries,” adding, “Expanding demand for ESS in artificial intelligence (AI) data centers will serve as a growth driver in the medium to long term.”
iM Securities estimated that LG Energy Solution’s second-quarter revenue would reach 7.6 trillion won, a 15% increase from the previous quarter, and that operating profit would turn to a profit of 229 billion won during the same period. These figures slightly exceed market forecasts of 7.2 trillion won in revenue and 202.9 billion won in operating profit.
Analyst Jeong Won-seok explained, “AMPC is expected to reach 243 billion won, an increase of approximately 28% from the previous quarter, driven by increased ESS production in the U.S.” He added, “While the automotive battery segment is expected to remain sluggish due to the suspension of GM’s Ultium Cells production line in the U.S., the possibility of further deterioration is limited as European volumes are gradually recovering.”
He continued, “For ESS, shipments are expected to rise significantly quarter-over-quarter, driven by the expansion of renewable energy and increased investment in AI data centers, leading to a roughly 40% increase in revenue. Profitability will also improve markedly due to higher utilization rates and the AMPC effect.” He added, “Small-sized batteries are also expected to contribute to improved performance, driven by increased shipments of cylindrical batteries following strong Tesla sales.”
Analyst Jeong predicted that the expansion of AI data centers will drive structural growth in the ESS market. He stated, “AI data centers have higher power consumption and greater load volatility than conventional data centers, so ESS will establish itself as a core infrastructure component,” and projected, “Global ESS battery shipments for AI data centers are expected to surge from 12 GWh in 2025 to 272 GWh in 2030.”
He noted, “It is also positive that LG Energy Solution is expanding discussions on ESS supply with U.S. hyperscalers,” adding, “The outlook for U.S. ESS demand is likely to be revised significantly higher than current market expectations, and as a result, new orders will steadily increase.”
Furthermore, he assessed, “The current stock price stands at a price-to-earnings ratio (PER) of 23.5 times based on projected 2028 earnings, indicating that valuation pressures have eased considerably compared to the previous EV-driven rally,” and noted, “Given the expected policy benefits—such as U.S. tariffs, tax incentives, and supply chain regulations—a selective strategy of increasing exposure to battery cell manufacturers remains valid.”