As LG Electronics slipped into a downturn after posting an operating loss in the fourth quarter last year for the first time in nine years, the market says this year will be a watershed that determines the trajectory of future results. With growth slowing in the global home appliance market and Chinese companies stepping up their offensive, the traditional B2C (corporation-consumer transaction) business environment remains tough, and attention is on whether the pivot to B2B (corporation-to-corporation transaction) businesses such as vehicle components and heating, ventilation and air conditioning (HVAC) will translate into results.
Aggregating forecasts from major domestic and overseas securities houses and investment banks on the 9th, LG Electronics' operating profit this year is expected to reach 3 trillion to 4 trillion won. As one-off expense burdens such as voluntary retirement reflected in last year's fourth-quarter results ease, analysts say the growth leverage of the B2B institutional sector centered on vehicle components and HVAC will begin to kick in.
The 2026 consensus from major brokerages puts revenue at 93 trillion to 95 trillion won and operating profit at 3.5 trillion to 4 trillion won. The prevailing view is that revenue and operating profit will show a modest recovery from the previous year. There is an outlook that B2B businesses such as vehicle components and HVAC will account for more than 70% of operating profit, while the home appliance business will take on a defensive role of reducing earnings volatility. The interpretation is that the improvement is based on a reshaping of profit sources driven by changes in the business structure rather than a rebound in the home appliance business.
◇ Home appliances are stagnant… "Defend" with premium and subscriptions
A conservative view still prevails on traditional home appliance businesses such as home appliances and TVs. With the global home appliance market entering a mature phase and Chinese companies strengthening price competitiveness, top-line growth is expected to be limited. The securities industry expects the home appliance business to remain in a role of defending profitability through premium products and subscription models rather than driving results as it did in the past.
It is assessed that the company maintains competitiveness in high value-added categories such as premium built-in appliances and robot vacuums, and that appliance subscriptions and maintenance services generate recurring revenue and cushion earnings volatility. However, many analysts say it is difficult to expect a meaningful short-term rebound in display-based businesses such as TV and IT due to delayed demand recovery and marketing expense burdens.
Research firm Counterpoint Research projected that the global home appliance market will remain in the mid-2% growth range this year, continuing a slowing trend. As volume competition intensifies amid price offensives from China's Haier Smart Home Co., Ltd. and Midea, LG Electronics is expected to lift its average selling price (ASP) with a focus on premium built-in appliances and robot vacuums, and defend margins by expanding subscription services. Although the TV market is also expected to contract, the company is seen focusing on defending profitability with a premium strategy centered on organic light-emitting diode (OLED). Another research firm, Omdia, likewise projected that while home appliance revenue will remain flat, recurring revenue based on subscriptions and platforms will play a buffering role.
◇ Vehicle components and HVAC emerge as growth pillars
By contrast, the vehicle component (VS) and HVAC businesses are cited as key pillars driving LG Electronics' earnings recovery. Analysts say that as electric vehicles (EVs) spread and the shift to high-end in-vehicle infotainment, software-defined vehicles (SDV), and AI-defined vehicles (AIDV) accelerates, demand for vehicle components is structurally increasing. LG Electronics is assessed to have entered a phase where revenue is being fully reflected in results, backed by a large order backlog in vehicle components.
The HVAC business has also expanded its portfolio from mainly residential to commercial and industrial climate control, with rising cooling demand from the spread of AI data centers emerging as a new growth driver. The industry expects the data center cooling market to maintain double-digit growth over the mid to long term, and analyzes that companies with chillers and system air conditioners are likely to benefit structurally.
Brokerages are also increasingly saying the robotics business is emerging as LG Electronics' mid- to long-term growth pillar. In a recent report, Daishin Securities Co. researcher Park Kang-ho said LG Electronics is strengthening competitiveness in humanoids and AI robot solutions through synergies with affiliates such as LG Innotek, LG Display and LG Energy Solution, and evaluated 2026 as the first year of an earnings turnaround for new businesses including robots.
Research firm IDC projected that the EV and SDV markets will grow at an average annual rate of 18% through 2026, and demand for in-vehicle infotainment modules will rise more than 20%. As demand for vehicle components shifts from simple quantitative expansion to a focus on high value-added software and integrated solutions, analysts say profitability has more room to improve for companies with secured order backlogs. In HVAC, the data center cooling market is expected to maintain double-digit average annual growth, with the share of industrial climate control expanding quickly.
A securities industry official said, "Whether LG Electronics' results recover depends less on a rebound in the home appliance business and more on how far B2B businesses such as vehicle components and HVAC can raise profitability," adding, "This year will be the first year in which the outcomes of the business pivot are verified by the numbers."