KB Securities evaluated on the 24th that LG Electronics is expected to achieve record-high performance. The investment opinion is to maintain 'buy' and adjust the target price up by 9% from 110,000 won to 120,000 won. The closing price of LG Electronics on the previous trading day was 82,400 won.
Kim Dong-won, a researcher at KB Securities, noted, "The sales share of heating, ventilation, and air conditioning (HVAC) products, which secured a double-digit margin, accounts for one-third of total sales," and added, "Logistics costs, which have already peaked, are likely to decrease further in the second half, alleviating concerns over tariffs on LG Electronics due to the diversification of global production facilities."
KB Securities estimated that LG Electronics' home appliances division will achieve sales and operating profits of 35 trillion won and 2.3 trillion won, respectively, an increase of 5% and 10% compared to the previous year. This marks a record high performance. They also expected that in the first quarter of this year (January to March), driven by robust appliance (H&A) sales, the revenue would increase by 6% year-on-year to 22.3 trillion won, while operating profit would decrease by 12% to 1.17 trillion won.
Researcher Kim stated, "In particular, the sales amount of the home appliances sector in the first quarter is expected to be close to 10 trillion won, and the operating profit is likely to exceed 1 trillion won," adding that they expect record-high results for the quarter. KB Securities projected that LG Electronics' operating profit for the first quarter of this year will exceed the initial estimate (1.04 trillion won) by 12%.
Researcher Kim also positively assessed that LG Group operates a System on Chip (SoC) center, which continues to secure research and development (R&D) personnel and enhance semiconductor chip design technology.
He said, "The SoC center is simultaneously procuring high-performance semiconductors in areas such as ▲ AI ▲ robotics ▲ automotive ▲ home appliances using advanced foundry processes like TSMC, while also pushing for external supply," adding, "With the development of chiplet technology being jointly pursued with ARM, Synopsys, Bosch, and BMW, synergy with chiplet technology is anticipated this year in line with the blooming CXL (chiplet high-speed data transfer between chiplets) market."
He further explained, "LG Electronics is reportedly seeking collaboration opportunities related to quantum computer chips with companies like Microsoft and IBM, indicating that the SoC center will lead new businesses in the long term."