Kiwoom Securities noted on the 19th that LG Electronics' performance in the fourth quarter of this year is expected to fall short of market expectations, but considering steps to enhance corporate value, now is the time to increase position. Kiwoom Securities maintained its investment opinion and target price for LG Electronics at "buy" and 140,000 won, respectively. The previous closing price for LG Electronics was 91,500 won.
According to Kim Sowon from the Research Institute of Kiwoom Securities, LG Electronics' estimated consolidated sales for the fourth quarter of this year are approximately 22.3 trillion won, with operating profit at 314.8 billion won. Kim projected that it will fall short of the market's expected operating profit of 472.8 billion won. He said, "Despite the increase in the exchange rate of the won against the U.S. dollar, due to weak front demand and rising expense for LG Electronics, standalone operating profit is expected to turn to a loss."
However, Kim evaluated that LG Electronics' efforts to enhance corporate value are positive. On the 17th, LG Electronics announced a second corporate value enhancement plan containing a proposal to retire approximately 761,000 shares. Kim noted, "Considering LG Electronics' recent proactive announcements regarding value-up plans, there are hopes for share buybacks or strengthened shareholder returns in the future," and recommended increasing positions leveraging the off-season at the end of the year.
Kim forecasted that LG Electronics will grow centered on its platform business and business-to-business (B2B) transactions, leading to an improvement in performance beginning in 2025. He mentioned, "In 2025, webOS and home appliance subscription operating profit is expected to increase by 32% compared to this year and will account for about 17% of LG Electronics' standalone operating profit." He added, "The stabilization of liquid crystal display (LCD) TV panel prices and the termination of depreciation of LG Display’s organic light-emitting diode (OLED) TV facilities in Guangzhou in the second half of 2025 will also contribute to improving profitability."