NCC - Korea Stock Market Insights

1. What Happened?: LG Chem’s H1 Report and NCC Split Announcement

LG Chem’s H1 2025 report revealed strong performance from LG Energy Solution and growth in advanced materials and life sciences. However, the petrochemical division continues to struggle with losses. The announcement to consider splitting off the NCC business has added another layer of complexity.

2. Why It Matters: Petrochemical Struggles vs. Future Growth Drivers

The underperformance of the petrochemical division weighs heavily on LG Chem’s overall results. Meanwhile, LG Energy Solution, advanced materials, and life sciences are seen as key growth drivers for the future. The proposed NCC split is intended to strengthen the petrochemical business but also introduces uncertainty.

3. What To Do: Investment Strategy and Considerations

LG Chem has long-term growth potential, but short-term performance may be affected by the uncertainties surrounding the petrochemical division and macroeconomic factors. Investors should closely monitor future announcements regarding the NCC split and the petrochemical division’s turnaround efforts. The current investment recommendation is ‘Hold,’ and strategies should be reevaluated as the situation evolves.

4. Investor Action Plan: Ongoing Monitoring and Information Gathering

Monitor petrochemical division performance and turnaround strategy.
Follow announcements regarding the NCC split and market reactions.
Assess the continued growth of LG Energy Solution, advanced materials, and life sciences.
Track changes in macroeconomic factors (exchange rates, oil prices, interest rates).

1. What’s Happening?: Potential Sale of Yeosu NCC Plant No. 2

LG Chem officially confirmed the possibility of selling its Yeosu NCC Plant No. 2 in a regulatory filing on August 26, 2025. While not yet finalized, the sale is being considered as a strategic option to enhance the competitiveness and value of its petrochemical business.

2. Why?: Addressing Petrochemical Struggles and Securing Future Growth

LG Chem’s petrochemical business has been facing prolonged challenges due to the global economic slowdown and oversupply. The potential sale of the NCC plant is interpreted as a strategic move to streamline assets, improve financial structure, and redirect resources towards future growth engines like battery materials, life sciences, and advanced materials.

3. What’s Next?: Analyzing Potential Scenarios

Positive Scenario: A successful sale could improve LG Chem’s financial health, enabling increased investment in future growth areas and driving higher corporate value.
Negative Scenario: Delays or failure to sell the plant could prolong the struggles in the petrochemical business and hinder investment in key growth sectors.

4. What Should Investors Do?: Short-Term and Long-Term Strategies

Short-Term Strategy: A cautious approach is recommended until uncertainties surrounding the sale are resolved. Investors should closely monitor related news and filings, adapting their strategies to market changes.
Long-Term Strategy: Focus on the competitiveness of LG Chem’s high-growth sectors like LG Energy Solution, life sciences, and advanced materials, while observing the restructuring process in the petrochemical business to identify long-term investment opportunities.

Tag: NCC

LG Chem’s NCC Split: What Investors Need to Know