2Q26 preliminary EBIT below expectation Quick Note

研报英文原文证据摘录

2Q26 preliminary EBIT below expectation Quick Note

Global Markets Research

LG Energy Solution 373220.KS 373220 KS 7 July 2026

EQUITY: CHEMICALS

Rating2Q26 preliminary EBIT below expectation Remains Buy

Target price KRW 600,000 RemainsQuick Note

Closing priceLG Energy Solution (LGES) on 7 July released its 2Q26 preliminary results. Revenue 7 July 2026 KRW 332,000

increased 15.3% q-q and 24.8% y-y to KRW7.6tn. The company recorded an operating profit

of KRW113.3bn (back in the black q-q and -77.0% y-y). 2Q26 revenue was in line with the

Bloomberg consensus estimate, but its operating profit was 46% below consensus. Research Analysts

According to the company, the operating profit of KRW113.3bn in 2Q26 included a Asia Energy

potential IRA tax credit of KRW240.9bn, a part of the IRA advanced manufacturing Cindy Park - NFIK

production tax credits (AMPC; Section 45X of the IRA). We estimate that this tax credit – cindy.park@nomura.com

which is for both EV/ESS shipments – implies ~5.0GWh of battery shipments in the US, at +822 3783 2324

USD35/kWh, and indicates an increase compared to the implied US shipments of 4.0GWh Dongmin Lee - NFIK

in 1Q26 (link). Without the IRA tax credit, LGES would have posted an operating loss of dongmin.lee@nomura.com

KRW127.7bn. We think that the following might have kept 2Q26 in an operating loss +822 3783 2338

(excluding AMPC): 1) LGES’s failure to receive/recognize penalty payment from EV

battery customers contract cancellations; and 2) ESS high fixed costs in the US.

• In regard to LGES’s ESS business in the US, 1) we estimate LGES’s ESS capacity in

the US will jump to 47/75GWh by end-2026/27F (2025: 20GWh) across five

production sites; 2) supply to the largest ESS customer should begin in 2027F,