Since last year, LG CNS, which had been accelerating its overseas business, expressed a strong commitment to global expansion at a recent press conference for its initial public offering (IPO).
Hyun Shin-Gyoon, president of LG CNS, noted at a meeting held on the 9th at the Conrad Hotel in Yeouido, Seoul, that, “We will use this IPO as a stepping stone to enhance our capabilities in artificial intelligence (AI) and cloud technology, as well as digital transformation (DX) technology, and to solidify our global business, becoming a ‘first mover’ in the global DX market.” He also mentioned plans to invest a significant portion of the IPO proceeds into acquiring and investing in DX specialized corporations.
LG CNS plans to expand its global DX business based on its solutions. It has already introduced several offerings to the global market, including the digital marketing optimization platform “LG Optapex” for online marketplace sellers, the TES automated testing solution for enterprise resource planning (ERP), and “SINGLEX,” which provides global solutions for key business areas like human resources, marketing and sales, manufacturing, research and development, and quality management on a single platform in a Software as a Service (SaaS) format.
The company is also accelerating its global expansion in the areas of smart cities, smart factories, and smart logistics. Last year, LG CNS formed a joint task force (TF) with the Indonesian government to conduct smart city consulting and is pursuing participation in the construction of a city-integrated operation center and transportation infrastructure for the new capital project.
In particular, LG CNS is strengthening its global expansion through partnerships with leading local corporations. In September of last year, it established a joint venture in the DX business with the Sinarmas Group in Indonesia. LG CNS has also signed a partnership with SAP, the world’s leading ERP corporation, to strengthen its next-generation ERP business.
Kim Ji-hyun, a research institute member at Heungkuk Securities, evaluated that "LG CNS is enhancing partnerships through joint ventures (JVs) with global corporations centered on its strengths in finance/public, cloud, and smart engineering areas, expanding its effective overseas market, and transitioning into a profitability-enhancing structure based on the internalization of core technologies and service capabilities."
LG CNS's overseas business revenue is growing. In 2023, LG CNS's overseas business revenue increased by 43% compared to the previous year, surpassing 1 trillion won. The revenue from overseas business in 2022 also grew by 42% compared to 2021. In the first half of 2024, LG CNS's overseas business revenue increased by more than 38% compared to the same period last year.
According to LG CNS's Q3 2024 report, the cumulative revenue was 3.9584 trillion won, a 7% increase compared to the same period last year, and the operating profit was recorded at 312.8 billion won, up 17.5%.
Eom Soo-jin, a research institute member at Hanwha Investment & Securities, analyzed that "While expectations are high that the market capitalization right after the IPO will significantly exceed the net worth of LG CNS, even considering the discount rate that will apply when unlisted subsidiaries are listed, it is possible to expect an increase in the net worth of LG Co., Ltd., the largest shareholder holding 49.95% of LG CNS's equity."
Choi Kwan-soon, a research institute member at SK Securities, said, "LG CNS is currently recording a market capitalization of around 10 trillion won in the over-the-counter market, making a successful listing a factor to increase the stock price of LG Co., Ltd. through the realization of equity value and cash acquisition through secondary sales."