SEOUL, KOREA - The stock price of LG Chem fell almost to the daily lower limit on October 21 after it announced the third-quarter financial results, which were considered an earnings shock level. The company saw its market value evaporate more than 2 trillion won in a single trading day. Its shares were closed at 194,000 won, down 14.16 percent (32,000 won) from the previous day's 226,000 won. This is the lowest level in five years since November 2009.

 

The market capitalization of the company declined by 2,121 billion won to 12,856 billion won, with its ranking in the KOSPI market tumbling to 17th from 13th. Earlier, LG Chem had announced its financial performance for the third quarter that was much lower than market consensus figures, largely due to poor results in its battery and electronic materials business.

 

The quarterly sales revenue and operating profit for the company were 5,663.9 billion won and 357.5 billion won, respectively, down 3.5 percent and 0.6 percent from the previous quarter. Its operating profit is 12 percent lower than the average market consensus figure.

 

Institutional investors including investment trusts, pension funds, and private equity funds led the sell-off, with the net-selling balance of 106.4 billion won for the day. Foreign investors also net-sold the stock by 28.3 billion won. Only individual investors net-bought the stock by 134.2 billion won.

 

Article provided by The Korea Economic Daily