Sangsangin Securities reported on July 9 that LG Electronics has strengthened its core business profitability through expanded sales in home appliance subscriptions and business-to-business (B2B) transactions. The firm noted that the company's cooling solutions for AI data centers and robotics components will serve as factors for valuation reassessment. Consequently, Sangsangin raised its target price for LG Electronics to 230,000 won while maintaining a 'buy' rating.
In a report released that day, analyst Jeong Min-kyu stated, "LG Electronics is expected to maintain a profit growth trend despite a seasonal decline in operating profit to 962.8 billion won in the third quarter, thanks to the expansion of home appliance subscriptions and B2B sales, as well as improved profitability in the vehicle component solutions (VS) sector."
He added, "Key momentum in the second half will depend on securing orders for AI data center chillers from North American clients and the development of the robotics actuator business. We are also paying attention to the increase in HVAC (heating, ventilation, and air conditioning) shipments due to market expansion in Europe."
Jeong projected that LG Electronics will achieve sales of 96.1629 trillion won this year, a 7.8% increase from the previous year, and an operating profit of 4.5839 trillion won, up 84.9% year-on-year.
Regarding the second quarter's revenue, he noted, "The figures include approximately 400 billion won in customs refunds, but even excluding this, the normal operating profit is expected to be around 1.2 trillion won, exceeding consensus estimates. Improvements are anticipated across major business divisions, including strong sales of high-value media entertainment solutions (MS) TVs and enhanced profitability in VS projects, in addition to the refunds concentrated in home appliances (HS)."
* This article has been translated by AI.
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