LG CHEM was strong early on the 22nd. The stock rose after news that the overseas activist hedge fund Palisade Capital proposed measures to boost shareholder value, saying LG CHEM's current share price is undervalued.
As of 9:08 a.m. that day, LG CHEM was trading at 380,000 won, up 34,000 won (9.83%) from the previous session.
Palisade Capital distributed a press release that day and said it proposed board reorganization and a share buyback at LG CHEM. The suggestion is interpreted to mean there is room to lift the share price by strengthening shareholder return policies, given the current undervaluation.
Palisade Capital also noted that LG CHEM's share price has been valued as a petrochemical sector play, and that although the value of its 79% equity in LG Energy Solution, the No. 3 company by market capitalization in Korea, amounts to three times LG CHEM's market cap, the stake is not being properly valued.
Palisade Capital said, "LG CHEM shares are trading at a 74% discount to net asset value (NAV)," and explained, "There is a 69 trillion won (about $48.3 billion) value gap."