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MarketScreener Homepage  >  Equities  >  KOREA EXCHANGE  >  LG Chem Ltd    051910   KR7051910008

LG CHEM LTD

(051910)
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Volvo taps Asia's LG Chem, CATL for long-term battery supplies

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05/15/2019 | 02:45am EDT
FILE PHOTO: Volvo's new XC40 SUV is displayed during a media preview at the Auto China 2018 motor show in Beijing

SEOUL/BEIJING (Reuters) - Swedish carmaker Volvo said on Wednesday it had signed long-term battery supply deals with Asian firms LG Chem and Contemporary Amperex Technology Co Ltd (CATL), as it pushes its EV target of 50 percent of sales by 2025.

The agreements follow a series of pacts between Asia-based battery companies and global carmakers, who are planning a $300 billion surge in spending on electric vehicle (EV) technology over the decade.

Long-term battery supply arrangements are much-valued by carmakers and investors, as they help to clear supply bottlenecks at a time of soaring demand and hold out the promise of cheaper batteries over time.

Volvo Cars is investing about 5% of its annual revenue - a little more than $1 billion a year - on electric and driverless cars.

The company, owned by China's Geely, is launching EV models under the Volvo marquee and luxury performance sub-brand Polestar as it takes on global peers including Volkswagen, Tesla and General Motors.

Volvo has said it plans to get half its sales from fully electric cars by 2025 and expects its margins on electric cars to match those of vehicles with combustion engines by that time.

"The future of Volvo Cars is electric and we are firmly committed to moving beyond the internal combustion engine,” Volvo Cars President and CEO Hakan Samuelsson said in a statement on Wednesday.

European auto makers typically source batteries from companies in China, South Korea and Japan, which dominate the supply chain for EV batteries.

The United States has recently sought to limit China's EV supply chain dominance, Reuters reported.

The Volvo deal sent shares in LG Chem and CATL up more than 3% on Wednesday.

The companies said the battery deals were valued at several billion dollars but did not disclose detailed financial terms.

Volvo said its first battery assembly line was under construction at its manufacturing plant in Ghent, Belgium, and would be finalised by the end of this year.

It was building plug-in hybrid variants of the XC40 in Ghent and planned to make fully electric XC40s there, it added.

(Reporting by Cynthia Kim and Hyunjoo Jin in Seoul, Yilei Sun in Beijing; Editing by Stephen Coates)

By Cynthia Kim and Yilei Sun

Stocks mentioned in the article
ChangeLast1st jan.
GENERAL MOTORS COMPANY 0.43% 37.12 Delayed Quote.10.97%
LG CHEM LTD End-of-day quote.
TESLA INC. -2.23% 220.83 Delayed Quote.-33.64%
VOLKSWAGEN AG 1.06% 142.64 Delayed Quote.2.68%
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Financials (KRW)
Sales 2019 30 209 B
EBIT 2019 1 592 B
Net income 2019 1 006 B
Debt 2019 5 684 B
Yield 2019 1,76%
P/E ratio 2019 24,2x
P/E ratio 2020 14,3x
EV / Sales2019 791x
EV / Sales2020 656x
Capitalization 23 886 B
Chart LG CHEM LTD
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Income Statement Evolution
Consensus
Sell
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Mean consensus BUY
Number of Analysts 31
Average target price 443 548,39  KRW
Last Close Price 328 000,00  KRW
Spread / Highest target 82,9%
Spread / Average Target 35,2%
Spread / Lowest Target -5,49%
EPS Revisions
Managers
NameTitle
Jin-Soo Park Vice Chairman & Chief Executive Officer
Ho-Young Chung President, Chief Financial Officer & Director
Jin-Nyeong Yoo President-Executive & Chief Technology Officer
Se-Jin Kim Outside Director
Bon-Joon Koo Vice Chairman
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