[Click eStock] "LG Saenghwal Geongang to Outperform Market Growth in Q3"

Meritz Securities Issues 'Buy' Investment Opinion and Sets Target Price at 1.8 Million Won... Closing Price on 29th Last Month Was 1.448 Million Won

Elastine by LG Household & Health Care (Photo by Asia Economy DB)

[Asia Economy Reporter Kum Bo-ryeong] An analysis has emerged that LG Household & Health Care is expected to show performance exceeding market growth in the third quarter.

According to Meritz Securities on the 5th, LG Household & Health Care's third-quarter results are estimated at sales of 1.9225 trillion KRW and operating profit of 321.6 billion KRW. Compared to the previous year, sales are expected to decrease by 2.2%, but operating profit is projected to increase by 3.1%.

The cosmetics division is expected to record sales of 1.0172 trillion KRW and operating profit of 183.1 billion KRW. Compared to the previous year, these figures represent decreases of 12.4% and 13.8%, respectively, but the contraction is expected to narrow compared to the second quarter. Hanuri, a researcher at Meritz Securities, explained, "The narrowing contraction is due to the recovery in duty-free sales; it was -45.2% in the second quarter but is estimated at -30.9% in the third quarter. Overseas sales are expected to continue double-digit growth at 14.8%. The strong sales in China (22.7%) are believed to have been a key factor."

The household goods division is expected to achieve sales of 498.2 billion KRW and operating profit of 76.2 billion KRW, representing increases of 24.2% and 68.2%, respectively, compared to the previous year. The increase in hygiene product sales and the expansion of the premium segment are also anticipated. The Chuseok holiday demand (gift set sales) and the reflection of warmth from 'Physiogel,' estimated at 15 billion KRW, are expected to contribute as well.

Researcher Han said, "The beverage division is expected to record sales of 407.1 billion KRW and operating profit of 62.3 billion KRW, growing 1.0% and 13.7%, respectively, compared to the previous year. Although sales growth will be sluggish due to the prolonged rainy season, channel mix improvement is expected."

Meritz Securities has given LG Household & Health Care a 'Buy' investment rating with a target price of 1.8 million KRW. The closing price on the 29th of last month was 1.448 million KRW. Researcher Han stated, "We judge that both brand competitiveness and profit stability have comparative advantages. Among domestic cosmetics brands, LG Household & Health Care is the only one exceeding market growth in key channels (duty-free and China). The household goods division benefits from portfolio diversification effects (New Avon and Physiogel), and in the beverage business, expectations for an increased proportion of high-margin channels remain valid."

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