On the 4th (local time), regarding the detention of Korean workers at the construction site of the Hyundai Motor Group-LG Energy Solution battery plant in Georgia, USA, the securities industry expects that it will negatively impact LG Energy Solution's sales volume next year.
On the 8th, LS Securities lowered the target stock price for LG Energy Solution from the previous 302,000 won to 300,000 won, while maintaining a 'neutral' investment opinion. This is because there is a high possibility that the timeline for mass production of batteries for Hyundai Motor Group's meta plant in America (HMGMA) will be delayed starting next year.
Jeong Gyeong-hee, a researcher at LS Securities, noted, 'The two companies invested about 57 trillion won after signing a joint venture establishment contract in May 2023,' adding, 'But the crackdown by immigration authorities will inevitably disrupt construction, and the U.S. sales volume for Hyundai Group next year is expected to decline.'
Following the recent crackdown by U.S. immigration authorities, about 450 people, including 30 Korean nationals, have been arrested. The immigration authorities regarded the existing practice of sending employees from Korean partners on short business trips (ESTA, B1 visa, etc.) to pass on technical know-how during the early stages of construction as illegal employment.
U.S. President Donald Trump defended this action, stating, 'The Immigration and Customs Enforcement did what it had to do.' In response, LG Energy Solution is dispatching its Chief Human Resources Officer (CHO) to the U.S. while completely halting all business trips to the country.
For construction companies participating in U.S. projects, a rise in labor costs is inevitable. Eugene Securities' alternative investment analysis team released a report that day stating, 'Due to this issue, construction companies will face ongoing pressures from a shortage of skilled workers with legal employment eligibility and rising labor costs,' adding, 'These constraints could limit the recruitment of workforce for large projects requiring substantial manpower.'
Currently, domestic construction companies engaged in projects in the U.S. include Hyundai E&C, DL E&C, and Samsung E&A.
However, since the U.S. market accounts for a relatively small proportion of the total revenue of major construction companies, the impact on short-term performance is expected to be minimal. Eugene Securities stated, 'It seems likely to have a limited impact on short-term performance, and how workforce procurement and management will be handled in the U.S. market in the future will emerge as a competitive edge in project execution.'