[Click eStock] "LG Saenghwal Geonhang, Strong Q2 Performance Thanks to Household Goods and Beverages"

Shinyoung Securities Issues 'Buy' Investment Opinion and Sets Target Price at 1.7 Million KRW... Closing Price on 23rd at 1.341 Million KRW

LG Household & Health Care's fabric softener 'Aura' (Photo by Asia Economy DB)

[Asia Economy Reporter Kum Boryeong] LG Household & Health Care showed strong performance in the second quarter, continuing the success of household goods and beverages from the first quarter, according to an analysis.

On the 24th, Shin Young Securities reported that LG Household & Health Care's second-quarter results recorded sales of 1.7832 trillion KRW and operating profit of 303.3 billion KRW. Compared to the same period last year, sales decreased by 2.7%, but operating profit increased by 0.6%.

In cosmetics, duty-free store sluggishness was inevitable, but overseas sales performed well. Domestic cosmetics sales in the second quarter decreased by 34.7% compared to the previous year. This was due to a 45% drop in duty-free store sales year-on-year in the second quarter, caused by difficulties in cross-border travel due to the COVID-19 pandemic.

Unlike domestic sales, China showed improvement compared to the first quarter. In the second quarter, offline stores of major brands increased, and Chinese online sales grew by more than 20% year-on-year. As a result, the difference between duty-free and local Chinese sales, which was more than double last year, decreased to less than 10% in the second quarter of this year.

The strong performance of household goods and beverages has continued since the first quarter. Shin Suyeon, a researcher at Shin Young Securities, said, "The household goods sector achieved both sales growth and profit improvement due to strong sales of premium products and hygiene products, similar to the first quarter. The cultivation of premium products within household goods is LG Household & Health Care's long-term strategic direction in response to intensified price competition after SKU rationalization in 2018. The proportion of these products increased by 4-5 percentage points year-on-year to 38%, showing initial results."

The beverage business also maintained strong performance due to increased sales of carbonated products, as in the first quarter. Researcher Shin explained, "The third quarter is the peak season for outdoor activities, so a positive trend similar to the first half of the year is expected."

Shin Young Securities gave LG Household & Health Care a 'Buy' investment rating with a target price of 1.7 million KRW. The closing price on the 23rd was 1.341 million KRW.

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