[Click eStock] "LG Electronics, Q2 Earnings Expected to Be Better Than Concerns"

Kiwoom Securities Issues 'Buy' Investment Opinion and Sets Target Price at 90,000 Won... Closing Price on 8th at 64,000 Won

[Asia Economy Reporter Kum Bo-ryeong] There is a forecast that LG Electronics' second-quarter performance will be better than expected.

According to Kiwoom Securities on the 9th, LG Electronics' estimated operating profit for the second quarter is 431.2 billion KRW, which is expected to exceed the market consensus of 397.3 billion KRW. The 431.2 billion KRW figure represents a 60% decrease from the previous quarter and a 34% decrease from the previous year.

In the home appliances sector, which contributes significantly to profits, the domestic market focused on premium products is rapidly normalizing. Air conditioners are also expected to benefit from the peak season effect. TV market demand is better than expected, especially with a rapid recovery in North American demand being observed.

Kim Ji-san, a researcher at Kiwoom Securities, stated, "The smartphone 'Velvet,' which focuses on cost-effectiveness and design, will contribute to reducing losses. Business solutions will support solid performance with strong sales of IT products such as laptops due to the spread of remote education. On the other hand, automotive parts are inevitably facing an expansion of losses due to production disruptions at client companies and weak upstream demand, and this division is expected to recover the latest among all business units."

Home appliances have strengthened their competitiveness centered on steam sterilization health appliances and premium products through the COVID-19 pandemic phase. Researcher Kim explained, "Looking at China's precedent, demand returned to normal levels 16 weeks after the outbreak of COVID-19, and if the US and Europe follow the same pattern, the demand base is expected to be restored to last year's level from July. For TVs, an improvement in the product mix centered on OLED is expected in the second half of the year, and smartphones show signs that the recovery speed may accelerate in the future, focusing on entry-level 5th generation (5G) phones."

Kiwoom Securities gave LG Electronics a 'Buy' investment rating with a target price of 90,000 KRW. The closing price on the 8th was 64,000 KRW.

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