Good afternoon. We will now start LG Chem's 2022 second quarter earnings conference call. I am Hyun- Seok Yoon, head of IR at LG Chem. Thank you for taking an interest in LG Chem and joining this call despite your busy schedules. We will begin with a brief introduction of 2022 Q2 earnings performance and outlook, followed by the CFO presentation highlighting the company's earnings results, then a Q&A session.
The presentations will be interpreted simultaneously while the Q&A will be interpreted consecutively. The material presented during this conference call can be viewed by those with web access. It is also available for download from our corporate website. Let's begin today's call with the introduction of the management team. We have CFO Dong-Seok Cha, Myung Suk Lee from Business Planning, Lee Dae Byeon from Petrochemicals, Yong Suk Lee from Advanced Materials, and Hee Soo Park from Life Sciences.
Let's begin with the business performance. On page three, we have consolidated Q2 sales and P&L. Q2 sales grew by 6% QoQ to KRW 12.24 trillion to consecutively record the highest ever quarterly sales. Operating profit was KRW 878 billion, and OP margin was 7%. Next page is a summary of our earnings performance excluding LG Energy Solution.
Sales was KRW 8.321 trillion, an increase of 6% QoQ, backed by the growth of the advanced material business. Operating profit was KRW 820 billion, a slight increase on quarter. Next, on page five, our financials on a consolidated basis. As of the end of the second quarter, assets were around KRW 66.3 trillion. Liabilities were around KRW 30 trillion, and capital was KRW 36.5 trillion.
Net asset value per share was KRW 397 thousand, an increase QoQ. Since LG Energy Solution IPO in January, the company's financial fundamentals improved significantly to record a bonds ratio of 81.5%, similar level to the previous quarter. However, total liability to equity ratio was 11.6% which increased QoQ due to the borrowings of around KRW 400 billion and increase in key investments to prepare for the Maxwell subsidiary in Q2.
Next, earnings and outlook by division. On page six, Petrochemical division. 2022 Q2 sales was KRW 5.988 trillion. Operating profit was KRW 513 billion, and operating margin was 8.6%. Amidst worsening market conditions, which had deepened compared to the initial expectation, profitability fell slightly.
However, based on the company's differentiated portfolio, we were able to record solid profits versus market conditions by strengthening high value-added business including POE, EVA, SAP, and NPG. In Q3, we expect challenging external environments to continue, such as rising raw material prices from continued high oil prices and supply shortage deterioration.
However, we'll defend our profitability center on high value-added premium products which have solid demand. Next, advanced materials. In Q2, advanced materials sales was KRW 2,018 billion, a 29% increase QoQ. In particular, with greater shipments of battery materials and a higher ASPs from rising metal prices, battery material business sales grew quarter-over-quarter by 70%. Led by an increase in shipments of high-margin products such as high nickel cathodes and semiconductor materials, and with favorable FX environment, profitability likewise greatly improved.
Operating profit was KRW 335 billion, and operating margin was 16.6%. In the third quarter, while impact to profitability is inevitable from the transition to falling metal prices, we expect continued growth led by the battery material business, including huge increase in cathode shipments.
Next, life sciences. In Q2, sales was KRW 222 billion and operating profit was KRW 24 billion. OP margin was 10.9%. With the market share expansion of key high-margin products such as growth hormones and diabetes treatment, sales grew YoY to generate robust profits. In Q3, while we expect solid sales performance to continue from the continued strengthening of key products market positioning and recovery of the aesthetic business in China, with the progress in the new drug development programs, we plan to expand R&D investment centered on clinical trials in the U.S.
Next, Farm Hannong. Q2 sales was KRW 241 billion, and operating profit was KRW 17 billion. Sales grew YOY due to increased sales at home and abroad of crop protection products, including an increase in Terrad'or exports. While the burden of rising raw material prices from the continued global inflation persists, annual earnings are expected to improve year-on-year as we realign the portfolio to center on premium products, including overseas business expansion of crop protection products and sales.
Next, LG Energy Solution. This morning, LG Energy Solution presented their performance in detail during its earnings release conference call. However, we'd like to briefly present their earnings here. In Q2, LG Energy Solution sales was KRW 5,071 billion, operating profit was KRW 196 billion, and OP margin was 3.9%.
Sales grew from the sales growth of EV cylindrical batteries and expansions of sales price linked contracts. However, profitability fell due to the time delay in applying the higher cost to the selling prices. In Q3, we expect sales to expand led by strategic customers, including major OEMs, new car launches and full operation of the first JV plant with GM. On this note, we will conclude the Q2 earnings presentation and invite CFO Dong-Seok Cha to present the highlights of the company's earnings performance.
Good afternoon. I am Dong-Seok Cha, CFO of LG Chem. Thank you for your great interest in the company's earnings release conference call and your participation despite your busy schedule. First, looking back on the second quarter, while physical business environment continued from the first quarter, such as continued high oil prices, global inflation and continued COVID lockdowns in China, we were able to record the highest quarterly sales once again in the second quarter. We were able to continue this trend, and this was as a result of us being able to increase ASP.
Meanwhile, LG Chem's profitability was 7.2%, which is slightly less than the previous quarter. However, based on the differentiated product portfolio, along with petrochemical business, realizing solid profitability compared to the market conditions, we were able to defend our profitability to a degree in a difficult environment, thanks to advanced material business, which recorded a huge increase in revenue and improved profitability.
In looking out to the second half, the company deems this current period as a period of one of the highest macro uncertainties. In particular, in the case of petrochemical business, slowdown in demand is deepening, coupled with the impact from the seasonal off-peak. Thus, we believe that market rebound in the second half is hardly going to be easy.
As such, the company to provide differentiated value to the customer and to be able to raise dramatically customer satisfaction, we will be actively pursuing commercial excellence activities. We are internally going to do thorough business management to increase its efficiency and also to make sure that we reinforce cash flow management in the areas of working capital and investment to prepare for the uncertainties.
However, even amidst such difficult circumstances for the company's top three new growth engines, we plan to expand the investment through unwavering and continued investment efforts. Particularly for the battery material business, which has grown dramatically this year, we will support this through continued investment and at the same time secure stable metal sourcing and also to expand premium product lineup and to reinforce the cooperation with OEM so that we are able to enjoy continued growth going forward.
Dear investors, as such, the company will not only continue generating solid profits by improving operational efficiency through the strengthening of product competitiveness, improvement in customer satisfaction and cost saving efforts, but also endeavor to continue with our preparations for future growth. I ask for your ongoing and continued support. Thank you.
Next, we will have the Q&A session. In order to give more people the opportunity to ask more questions, we will limit the question to two per person. If you have a question, please press star and one. If you want to cancel your question, press star and number two. The first question is from the line of John Park from CIMB. Please go ahead.
Thank you for the opportunity to ask questions. There are two questions that I would like to ask you. First with your petrochemical business, I would like to ask you what your view is about the overall market backdrop for the petchem market going forward. Do you believe that for the spread levels, that there could be a meaningful decrease in levels from where they currently stand this year? If we look at the overall performance that you are expecting for the second half of this year and for 2023, if there is any guidance, that would be appreciated. The second question that I would like to ask you is about your advanced materials business.
According to various press reports, I'm not sure if I should mention these names, but, for the likes of HM Materials and also Unico, I do believe that there are some speculation about a possible merger or acquisition of these companies. In the battery materials business, what type of opportunities are you interested in in terms of M&A opportunities going forward?
Yes. Maybe I can address your first question about the overall petrochemical market outlook going forward. If we look at the petrochemical market as of the current time in terms of the demand situation, supply side factors, and also in terms of material all in all, I do believe that across the board we do see a very challenging market backdrop on all sides. Of course, needless to say, there's the high oil price environment, which is very challenging.
Added to that, due to the spike in inflation that we have seen, there is concerns about a slowing down in the economy as a whole. In addition to that, we do see lackluster performance taking place in a recovery in terms of China. From China also, there is new capacity additions that we have been experiencing, and as a result of that, if we take everything into consideration going into the second half of 2022, we do think that the market environment will continue to be very challenging. However, for next year, there are also some positive factors that may take place. For example, various economic stimulation measures in China and a possible improvement in the situation in Ukraine.
If we look at the supply and demand dynamics in total, we do believe that as we pass through the first half of 2023, we may see a gradual recovery in the market, as this time passes. Maybe I can address your second question about our interests in M&A opportunities in the advanced materials business. If we look at the overall market, of course, there are various improvements in high speed recharging and also solid state batteries and also the overall stability of batteries within the market. As these overall trends take place, we do think that there needs to be opportunities that we develop with regards to new materials that would be able to address these market standpoints.
However, that has been said, within the area of cathode, we do believe that organic growth is a better opportunity for us. Therefore any investments that we make or any opportunities that we look at would be more on the side of next generation materials.
The next question is from the line of Cindy Park from Nomura Financial Investment. Please go ahead.
Yeah. Yes, thank you for the opportunity to ask questions. There are two questions that I would like to ask you. First, if you look at your overall cathodes and advanced materials business in general, I do believe that you have shown a very outstanding performance. I'm not sure if, you know, OP margins is the only standard that would represent this market. In terms of the overall profitability, I do believe that you have achieved the best within the overall cathode market as a whole.
The question that I would like to ask you is how do you believe that this is possible? Why was it possible for you to do this? And what are the drivers behind this performance? You have mentioned during the presentation that there was an increase in shipments and also in terms of your ASP.
In addition to that, have you been able to diversify your customer base further or maybe differentiate yourself in terms of how you are sourcing your overall raw materials? In addition to that, for the second half of the year, what would be your overall outlook for the second half? You did mention that in the third quarter there is a possibility of your overall profitability deteriorating. When we talk about a weakening of profitability, how much would that actually represent? In addition to that, on the operating profit, I do believe that the second half of the year would be stronger than the first half. Is this, you know, the right way to look forward to operating profit evolving?
The second question that I would like to ask you is about your overall petrochemical business. If you look at the current market backdrop, it does seem to be a very challenging market. As a result of that, for the players within this market, it seems to be that the overall utilization is running at very low levels. During the second half of the year for the company, how are you planning to run your overall utilization? In addition to that, there are a couple of capacity expansions that you had been planning.
For example, in the case of NBR latexes, I do believe that is one. However, if you look at the overall prices of the rubber gloves or the nitrile gloves, recently, it seems to be that prices are falling. For the CapEx expansion that you had planned in this area, is that still valid?
Maybe I can address your first question about the profitability. If we look at the drivers behind the strong performance and profitability in the second quarter, we do believe it is due to a wide variety of reasons. There has been a volume increase in our cathodes. In addition to that, we have seen a stronger performance from high nickel or high performance materials. In addition to that, we did have some very low cost metal stock that we were able to utilize, and the FX also moved in our favor. These factors all in all led to the profitability performance within the quarter.
If we look at the second half of the year, we do think that we will continue to have an increase in our overall sales volume. As a result of that, we do think that double-digit profitability will be achievable. In terms of further diversifying our customer base, we are in discussions with a wide variety of customers, and we do think that some of that effort will come to fruition in next year. However, we also believe that there could be some volatility in profitability due to factors that may happen, such as a sudden drop in metal prices or because we do see some weakness taking place in the display industry, which is the upstream, the downstream, for example, for various IT materials, that may materialize.
This is something that we are continuously monitoring. Maybe to address your second question about the petrochemical area. If we look at the first half, because oil prices had increased significantly, we did see spreads weakening. As a result of that, on the NCC PO side for utilization, we have been running at around 80%. However, for the ABS and PVC and POE capacity that we have, these have been running at normal levels. In addition, if we look at the second half of the year, we do believe that the overall market backdrop will be similar to the current situation. However, for the NCC unit, we will have our annual repair and maintenance taking place.
For NCC and for the downstream capacity that we have, there will be some adjustments in the overall utilization. For the market of course, we will continue to monitor the overall situation and also ensure that we can flexibly manage our overall annual maintenance timing according to the market trends. However, we do think that because of the weakening spread situation, it will be difficult for us to reach normal utilization for the NCC within the year. For the NBR Latex side specifically, which you have mentioned, it is true that the overall market is in an oversupply situation currently. As a result of that, for the capacity investments that we have slated and that are ongoing, we are trying to pace ourselves a bit more moderately with the execution.
However, for the areas that we are investing for more premium products and also sustainability related products, we are investing as planned, because we do believe that these are important areas that need to be invested for our future.
The next question is from the line of Jin-myung Lee from Shinhan Investment. Please go ahead.
So thank you for the opportunity to ask questions. There is a question that I would like to ask with regards to your advanced materials business and also another question related to your life sciences situation. So for advanced materials, we have seen very strong performance in this quarter. However, if you look at the recent market, I do think that metal prices are experiencing an adjustment or correction.
Going forward, what would be your view about metal prices? In addition to that, in the case that metal prices were to drop, then in terms of the absolute amount of profitability that you're able to generate then versus the first half, what size do you actually expect? Would it be higher or lower? The second question that I would like to ask you is that I do understand that for your gout treatment that this is going into a phase 3 clinical trial, and in addition to that you may have some updates with regards to your new drugs going forward. If you could provide that information to us, that would be appreciated.
Maybe I can address your question about our view for metal prices. Of course, you know, predicting metal prices in the current situation can be very challenging. However, as of now, the view that we have is that for nickel, we do think that there will continue to be supply coming out from Indonesia. As a result of that, we do think that overall prices will be slowing and also moderating at a, and stabilizing at a lower level. In the case of lithium, we do believe that prices will continue to be high going forward. For cathodes on the ASP side, as metal prices move, there may be some volatility in that number.
However, with regard to the overall and absolute amount of profitability that we are able to enjoy, we do not believe that there will be a change there. Going into the second half of the year, we do think that as our overall volume in sales for cathodes increase, that for the overall absolute amount of profitability that we're able to generate, that will also increase accordingly. However, if there were to be a clean, a big adjustment with regards to the overall metal prices in a very short period of time, then I do believe that may lead to some losses that we incur due to the inventory that we would have related to that metal. Life Sciences. We expect 2022 to be a very meaningful year in new drug development.
In the case of metabolic diseases, the pain killer is expected to enter clinical trial three this year, with the submission of the U.S. FDA clinical trial three IND in the third quarter of 2022, and clinical trials in multiple countries including China and Europe are expected to be launched within the year. The pain killer has confirmed safety and basic efficacy through clinical trial two, and through this large-scale clinical trial three, we are targeting approval in 2027 to secure differentiated efficacy. The current target for the U.S. market is about 10 million gout patients, and we expect the number of gout patients to continue to increase as the aging population and obese population increase. We expect sales of about $5 billion over 10 years after launch.
In the area of rare genetic obesity drugs and also NASH treatment, we have been able to make a lot of progress and achieve success through our clinical trials. For the rare genetic obesity drugs, we have entered into the phase I clinical trials in April 2020, and through that we were able to confirm various very positive results. In addition to that, we do believe that there has been a designation as a rare disease treatment in September 2020 for leptin receptor deficiencies and also POMC deficiencies in June of this year.
Once we have the designation as a rare disease treatment, then for the seven years following, we do have exclusivity in terms of the sales. We also believe that we will have additional opportunities for such designation in the area for protein deficiencies that lead to a decrease in appetite. In the NASH area, recently, if we look at the NASH treatment market trends, treatments that can block a wide variety of modes of action are the focus of the research efforts. For steatosis and alleviating treatment for that project and projects in this area, we are planning to complete the phase I clinical trials in the U.S. this year and go into a phase II within the year also.
In addition, for the project that would address fatty liver, we will be going ahead. We are in the process of having approval for a clinical phase one from the U.S. FDA. This actually started in March of this year. In addition, for the project that addresses liver fibrosis, we are in a preclinical trial stage. For the NASH treatment, as mentioned before, it is a disease that can take place for a wide variety of reasons and therefore we do think that by developing a combination therapy, that we will be able to have a mutual supportive synergy to be generated across the various projects that are currently ongoing.
In addition, in the area of anti-cancer treatments, which is an area in which we believe will be a next generation growth driver for us, we do have a CUE-102 project that is related to solid tumor immunotherapy. With the leadership of the original inventor, in May 2022, we have received IND approval for a phase I in the U.S. and clinical phase I. To ensure that we are able to secure next generation technical leadership in this area, we will be engaging upon a pre-clinical development for the cell treatment innovation that would be related to CAR-T and also iPSC and NK.
The next question is from the line of Youngs uk Shin from Morgan Stanley. Please go ahead.
Yes. Thank you for the opportunity to ask questions.
There are two questions that I would like to ask you. First, with regards to your advanced materials business. In the morning of today, there was actually an announcement that there would be a long-term agreement between GM and also LG Chem for the supply of cathodes. According to this agreement, for your mid to long-term cathode capacity, would there be any change in that plan? In addition to that, is there any intention to expand your capacity in the North American region?
The second question that I would like to ask you is that, the lockup period for LGES is something that would be lifted today, and I do think that there is a lot of news that has been generated surrounding this situation. From LG Chem's perspective, do you have any intention to further sell some of your LGES shares?
Maybe I can address your first question about the capacity expansion of our cathodes and the possibility of that. I do think that if you look at the overall capacity expansion plans that we have had for cathodes versus the local competitors that we see within the market, it is true that we have been a bit conservative. However, if you look at our mid to long-term strategy in terms of our capacity expansion and also the supply that we see coming from that based upon the discussions that we have with our clients in these areas about these topics, I do believe that there can be some changes accordingly.
Specifically in the North American region right now, we are in discussion about various supply conditions that we would have with our clients in this region, which it also includes the possibility of localization. Once this is confirmed, I do believe that there would be more information to share. Maybe I can address your second question about our intention for further selling down our stake in LG Energy Solution. It is true that the overall lockup that we were subject to does end today. However, I can clearly say that as of now, we do not have any plans to sell further down on the stake that we have.
We do believe that as a major shareholder, that we will continue to have an ownership that would enable us to have control over the company, because we do want to solidify the strategic cooperation that we have between the two companies. In addition to that, we do believe that in terms of the growth potential for LGES going forward, that there is a lot of potential that we see, and we do think that the overall firm value will continue to increase. For the time being, we do not have any plans to sell further.
The next question is from the line of Dong-j in Kang from Hyundai Motor Securities. Please go ahead.
Yes. Thank you for the opportunity to ask questions. There are two questions that I would like to ask you, and both are related to your petrochemical business. You did mention the outlook that you have for the petchem business, for the petchem market as a whole. If we look at specifically the outlook that you would have, for ABS, PVC and also caustic soda, could you share your view within those areas? In addition to that, the second question that I would like to have is that if you look at the overall market backup, for POE and EVAs, for solar voltaic panels, it does seem to be that there's a very strong market backup that we have.
What is your view about the situation, and how do you see the second half playing out and your profitability going forward?
Maybe I can address your first question. If we look at the PVC market and ABS market, and the recent market weaknesses that we have actually seen within this area, it is a lot due to the dampening demand situation within China. We do think that low demand from China is a situation that will continue into the second half of the year. If we look at the ABS market as a whole, right now, you know, there is not a lot of pent-up demand that we see within the market.
Added to that, in terms of a overall increase in overall external demand taking place, we do think that the possibility there seems to be a bit challenging. On the supply side, for ABS, there will continue to be new capacity that will be coming into the market. As a result of that, going into the second half of the year and also into next year, we do think that it will be the base or hollowing out of the market as a whole in terms of the market trend. It will be, you know, passing through the low point. As a result of that, if you look at our profitability for the ABS area, we do think that there will be some correction and adjustments that will take place.
To talk about the PVC side of the market, for the overall, construction materials, that is an area that is still challenging in the second half of the year. We do think that, you know, it will continue to be a low season, and there's also continuous uncertainties about how the Chinese economy will play out. As a result, we do think that the second half of the year will be a bit more weakening in terms of the overall pick-up in terms of demand versus the first half of the year. However, in terms of supply, there's actually no new PVC supply that will be coming into the market.
Added to that, versus the SM-based PVC, in the case of our carbide-based PVC versus carbide-based PVC, the overall methods that we are currently using do have a lot of benefits. As a result of that, over the mid to long term, we do think that there will be a gradual recovery in our margins.
[Foreign language].
Maybe I can actually go on to the POE and EVA discussion in terms of the question that you have asked. POE, EVA is actually used as a protection film for various solar photovoltaic panels. As we see the solar power generation market grow at around 10% per year, we do think that this market also will grow in line with that. For the POE side, in terms of the overall production process, because there are various complexities, it is very difficult for there to be entry. In addition to that, on the EVA side, because there's for example. I'm sorry.
For the POE side, because of the complexity of the overall production process, there's only five players within the market that are valid and formidable players within this market space. On the EVA side, there, because of the significant investments that are required for this business, it's actually a very difficult business area for new entrants to enter. As a result of that, there continues to be a shortage of supply within this area. Going into the second half of the year, I don't believe that the overall supply demand dynamics will change significantly. As a result, we do believe that the overall market backup will continue to be solid. However, on the EVA side, from China up until 2023, there will be significant capacity additions that will be taking place.
We do want to differentiate ourselves by focusing on the POE side of the landscape. We continue to strengthen our overall partnerships and cooperation that we have with our customers and also develop new products on the POE side that would provide a more premium positioning.
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The last question is from the line of Parsley Ong from JPMorgan. Please go ahead.
Hi, this is Parsley. Thank you for the chance to ask questions. I have two questions. The first question is, if I take the operating profit of all your different divisions and add them up, for example, chemicals, KRW 5.3 billion, energy solutions KRW 1.96 billion, et cetera. And if I compare that total, the sum of all those divisional OP to your reported operating profit of KRW 878 billion, then there is this other operating loss of KRW 207 billion in second quarter. Could you explain what that other operating loss is? And is that something like inter-segment sales from your cathode division to LGES, for example? And how should we think about this other operating loss going forward?
The second question is, media reported that LG Chem has a 20,000 ton per annum precursor joint venture with KEMCO. Could you share with us some details on the project background, your rationale, potential customer target or location, and whether you're gonna build some of the accompanying downstream cathode capacity, et cetera? Thank you.
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[Foreign language].
Maybe I can address your first question about what the difference is between the overall, you know, if we take up the overall divisions and add that as a total and look at that sum versus our consolidated operating profit. The difference can be reconciled using two factors. One would be some unrealized gains that we have. The second would be some investments that we have for future growth that is buried at the overall HQ level. Maybe I can go through these factors one by one.
In the case of the unrealized gains that we have for any intermediate material that is used to produce a final good before the final good is actually sold at the final level, when we do a consolidation for the material that has been provided, there is a deferral in the actual sales recognition for that. To give you an example, in the case that there are cathodes that we sell to LG Energy Solution, of course, for the advanced materials business, that cathode would be a sale to LG Energy Solution. There would be a recognition of operating profit at the divisional level. However, when we go into the consolidated performance, that cathode actually has to be produced into a cell.
That cell would have to be actually delivered to our customer from LG Energy Solution for the sales to be recognized. For cathodes that have been already sold to LG Energy Solution, but have not been sold to the final customer, then that is captured as an unrealized gain. The recognition of that is deferred until the final sales take place. That is part of the overall difference that you see between the divisional sum and the consolidated performance. In addition to that, in the case of our investments for future growth, there are investments that we make in various business divisions that are not recognized or captured at the divisional level.
For some of that, it's actually captured at the HQ level, in our operating profit. As a result of that, when we do our consolidation, it's only captured there. That's why the number would only be seen there. To address your question about what the trends will be going forward, because we do expect that our cathode sales will continue to increase, there may be an increase in the overall gap between the divisional sum versus our consolidated performance. However, we do want to maintain it at a full company level, to ensure that it does not become too large.
[Foreign language].
Maybe just to add on one comment to what has just been said. I do believe that during your question, you asked, you know, about the other operating losses that you would see of around KRW 200 billion. However, of the two factors that we have mentioned, I do think that for the future investments that we make for future growth that may be deemed to be a loss.
However, for the unrealized gains that we have, because this is a deferral of the recognition of those gains to the next quarter, I don't think it would be appropriate to say that this is a loss. If you look at our full year basis and compare last year to the performance that we have on this year, the second factor, i.e., the unrealized gains area or unrealized profit is the larger driver that has been driving the gap that you are currently seeing. Maybe I can go on to the second question that you have.
I do believe that for us to continue to supply cathodes appropriately, that sourcing the overall metals that we require and also enabling us to have a metal recovery or recycling area is very important for us. If you look at the current situation, the company is using nickel sulfate for our precursor operations. In addition to that, we do also want to continue to strengthen our capabilities in the metal recovery area. We do believe that the JV with KEMCO will enable us to have a very stable supply of recovered metals and be a foundation for us that can grow going forward.
This is a market in which we will be catering to customers that are in the North American region. For the JV in itself, it will be located in Ulsan. However, for the material that we have, it will be going to Chungju and also to the North American sites that we have to produce the cathodes that are required accordingly.
Thank you very much. With this, we would like to wrap up the conference call for the second quarter of 2022. Unfortunately due to the time constraint, we weren't able to cater to all of your questions. For those of you who had not received an opportunity to ask a question or for those of you that may have follow-up questions, please do not hesitate to contact our IR team. Once again, thank you for taking time to participate in this call.