(Updates with closing price in second paragraph.)
Feb. 1 (Bloomberg) -- LG Chem Ltd., South Korea’s biggest chemicals maker, rose to the highest level in more than five months in Seoul trading on expectations recovering petrochemical prices and sales of electric-car batteries will boost earnings.
The shares gained 3.7 percent to 388,000 won, their highest since Aug. 11. The benchmark Kospi Index climbed 0.2 percent.
Chief Executive Officer Kim Bahn Suk said earnings growth may gain momentum in the second half this year, after LG Chem reported yesterday the smallest quarterly profit in 2011. Petrochemical margins are improving and LG Chem’s investment in electronics has started to pay off, said Anthony Kim, a Seoul- based analyst at Woori Investment & Securities Co.
“Earnings are expected to rise quarter by quarter this year, drawing some investors to buy the stock,” said Kim, who maintains a “buy” recommendation on LG Chem.
Operating profit at the company’s electronics division, which makes batteries for notebooks and electric cars, more than doubled in the fourth quarter from a year earlier. LG Chem is set to “reap the fruits” of its investments in liquid crystal display glass and rechargeable batteries, Kim said.
Prices of acrylonitrile butadiene styrene, used in cosmetic cases and sporting goods, rose to $2,020 a metric ton in January after slumping to a year-low of $1,816 in November, according to LG Chem presentation materials given out to investors yesterday.
Overall first-quarter operating profit may rise 35 percent from the previous three months to 684.4 billion won ($608 million), according to Kim.
--Editors: Ryan Woo, Andrew Hobbs.
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