[Click eStock] "LG Electronics, Stronger Profitability Expected in Q1... Increasing Weight"

[Asia Economy Reporter Oh Ju-yeon] Kiwoom Securities analyzed on the 16th that LG Electronics' preliminary results for the fourth quarter of last year were disappointing, but this was likely due to one-time costs typically incurred during management transitions, and that going forward, there is a high possibility of reproducing the first-quarter profit-generating capability that has been repeatedly demonstrated over the past three years.

Researcher Kim Ji-san stated, "At CES2020, LG Electronics showcased product competitiveness leading technology centered on TVs and home appliances," and added, "If the global macro environment and consumer conditions improve this year, the performance improvement will expand based on solid product capabilities."

Regarding TVs, LG Electronics actively targeted early 8K demand, demonstrated proactive responses in the Micro LED and Mini LED sectors, and showcased advanced technology by unveiling roll-down TVs. Through expanding the OLED TV lineup, they signaled an aggressive approach using the Tokyo Olympics as an opportunity.

Researcher Kim predicted, "Home appliances will expand the AI IoT solution 'LG ThinQ Home' to develop hyper-connected technology unrestricted by location, and will actively commercialize home robots."

He forecasted that profit-generating capability will be maximized in the first quarter of this year. By business segment, Kim explained, "Seasonally, premium health appliances and rental businesses will drive high profitability in home appliances, and sales growth is being detected even in dryers, which had quality issues." He also noted that TV OLED panel procurement conditions have become favorable, and recent exchange rate trends will positively affect profitability, expecting pre-promotions ahead of major sports events such as Euro2020 and the Tokyo Olympics.

For smartphones, it is expected that under the Vietnam production system, the launch of flagship models V60 and G9 will have an average selling price (ASP) increase effect. Business solutions are diagnosed to have the brightest performance outlook, mainly in solar modules.

Researcher Kim maintained a 'Buy' investment opinion and a target price of 100,000 KRW, stating, "It is time to increase weighting in preparation for this first-half performance momentum."

This content was produced with the assistance of AI translation services.