Yuanta Securities has raised its target price for LG Electronics from 240,000 won to 280,000 won, citing positive contributions from new businesses such as artificial intelligence (AI) data centers and robot actuators.
In a report released on October 8, analyst Ko Sun-young noted that LG Electronics' consolidated revenue for the third quarter increased by 8.9% year-on-year to 23.827 trillion won, although its operating profit of 781.8 billion won fell significantly short of market expectations. However, she pointed out that the standalone operating profit exceeded 700 billion won, indicating stability in its core operations.
The third-quarter results were influenced by factors such as exchange rates and investments in new businesses. Revenue was affected by currency fluctuations and deferred sales in the vehicle component (VS) sector, while operating profit reflected investments in AI data centers and robotics, as well as some costs related to voluntary retirements.
Looking ahead, Ko identified AI data centers and robotics as key growth drivers. She emphasized that the AI data center business is on the verge of making a significant impact on earnings.
"LG Electronics has already secured orders worth 600 billion won in the first half of this year and recently signed a contract to supply cooling solutions for a 5-gigawatt (GW) AI data center in North America," Ko said. "By the end of the year, we expect to see a backlog of orders totaling up to 3.5 trillion won, primarily in the U.S. and the Middle East."
The robotics sector is also viewed as a next-generation growth engine following AI data centers. LG Electronics is advancing commercialization centered around its robot actuator, AXIUM. At its Yangjae data factory, the company is testing 200 units of its self-developed robot, Cloid.
Ko stated, "The company possesses technical strengths such as high-efficiency design, superior efficiency at the same size, and the use of existing heat dissipation technology, which will position it as a next-generation growth driver following AI data centers."
In a report released on October 8, analyst Ko Sun-young noted that LG Electronics' consolidated revenue for the third quarter increased by 8.9% year-on-year to 23.827 trillion won, although its operating profit of 781.8 billion won fell significantly short of market expectations. However, she pointed out that the standalone operating profit exceeded 700 billion won, indicating stability in its core operations.
The third-quarter results were influenced by factors such as exchange rates and investments in new businesses. Revenue was affected by currency fluctuations and deferred sales in the vehicle component (VS) sector, while operating profit reflected investments in AI data centers and robotics, as well as some costs related to voluntary retirements.
Looking ahead, Ko identified AI data centers and robotics as key growth drivers. She emphasized that the AI data center business is on the verge of making a significant impact on earnings.
"LG Electronics has already secured orders worth 600 billion won in the first half of this year and recently signed a contract to supply cooling solutions for a 5-gigawatt (GW) AI data center in North America," Ko said. "By the end of the year, we expect to see a backlog of orders totaling up to 3.5 trillion won, primarily in the U.S. and the Middle East."
The robotics sector is also viewed as a next-generation growth engine following AI data centers. LG Electronics is advancing commercialization centered around its robot actuator, AXIUM. At its Yangjae data factory, the company is testing 200 units of its self-developed robot, Cloid.
Ko stated, "The company possesses technical strengths such as high-efficiency design, superior efficiency at the same size, and the use of existing heat dissipation technology, which will position it as a next-generation growth driver following AI data centers."
* This article has been translated by AI.
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