Home Appliance Industry Expects Strong Performance Despite COVID-19 Resurgence

[Asia Economy Reporter Dongwoo Lee] Samsung Electronics and LG Electronics are expected to record strong third-quarter earnings despite the resurgence of the novel coronavirus disease (COVID-19).

According to financial information company FnGuide on the 30th, Samsung Electronics' operating profit for the third quarter of this year is projected to be 9.0534 trillion won. This represents a 16.3% increase compared to the same period last year (7.7779 trillion won).

The securities industry expects that while the semiconductor sector may slow down due to a decline in DRAM prices in the second half, overall performance is anticipated to rise through the recovery of demand for smartphones and home appliances.

There is also growing optimism that the launch of new smartphone models in the second half will strengthen Samsung's dominance in the global smartphone market. The company is targeting the global market with new products such as the Galaxy Note20 series and an expanded foldable phone lineup in the second half.

LG Electronics is forecasted to record an operating profit of 667.3 billion won in the third quarter of this year, which is a 14.4% decrease compared to the same period last year.

However, some in the securities sector predict that increased demand for new hygiene-focused home appliances due to COVID-19 and the rise in demand for large TVs from extended time spent at home will drive performance improvement.

Dongwon Kim, a researcher at KB Securities, said, "LG Electronics' operating profit for the third quarter of this year is estimated at 773.8 billion won, a 56% increase compared to the previous quarter, and is expected to exceed the market forecast of 669 billion won."

He particularly anticipated that the automotive components business would turn profitable from the first half of next year. Researcher Kim stated, "The shift of the world's largest electric vehicle market in 2020 from China to Europe is expected to act as a factor expanding the mid- to long-term performance improvement potential of ZKW, which has secured many European electric vehicle customers."

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