URGENT UPDATE: Palliser Capital has identified LG Chem Ltd. as the most undervalued stock among South Korean conglomerates, triggering a remarkable surge in the company’s shares. The activist fund revealed that LG Chem is trading at a staggering 74% discount to its net asset value, pushing its stock price to a high of 395,500 won—the highest in over a year.
During a presentation at the 13D Monitor’s 2025 Active-Passive Investor Summit in New York, Palliser urged LG Chem’s majority shareholder, LG Energy Solution Ltd., to reform its board and execute a share buyback using its stake in the battery maker. “We see a seismic opportunity for LG Chem to adopt bold initiatives that embody the ‘LG Way’ philosophy,” stated James Smith, Palliser’s founder and chief investment officer.
After these comments, LG Chem’s share price skyrocketed by as much as 14.3%, closing up 13.01% at 391,000 won. In contrast, the Kospi index rose by 1.56% to 3,883.63, taking a brief pause after hitting an all-time high earlier in the day.
Palliser outlined four key strategies to enhance LG Chem’s value, including an overhaul of its board of directors and management compensation systems, along with a proposed buyback-in-kind of shares utilizing its stake in LG Energy Solution. This buyback-in-kind approach would allow LG Chem to repurchase its shares by distributing shares of LG Energy instead of cash.
In a concerning financial update, LG Chem reported a loss of 68.5 billion won ($48 million) in the first half of this year, a stark contrast to an operating profit of 193.6 billion won during the same period last year. This financial strain follows LG Chem’s recent capital raising of 2 trillion won to fund corporate restructuring, disclosed on October 1.
Palliser also advocates for the implementation of a long-term discount management program that aligns with South Korea’s broader corporate reforms. This initiative is particularly relevant to South Korean President Lee Myung Bak’s vision to elevate the Kospi index to 5,000 points, a milestone yet to be achieved.
As LG Chem continues to navigate these turbulent waters, Palliser emphasizes the strategic positioning of LG Energy Solution, which has emerged as a leading supplier in the U.S. electric vehicle battery market. With a market capitalization of 27.57 trillion won, LG Energy is now the third-most valuable company on the Kospi, following industry giants Samsung Electronics and SK Hynix.
Palliser Capital has made headlines as one of the most vocal foreign activist investors targeting South Korea’s family-run conglomerates, including Samsung and SK Group. Their influence was recently underscored when SK Square Co. announced shareholder-friendly measures in response to Palliser’s advocacy for increased corporate value.
As developments unfold, investors and market watchers will be keen to see if LG Chem accepts Palliser’s proposals and how these strategies impact the company’s valuation moving forward. Stay tuned for more updates on this developing story.
