[Click eStock] "LG Sangsa, Earnings Turnaround and Affiliate Separation Expectations"

[Asia Economy Reporter Eunmo Koo] LG Corporation is expected to post results exceeding market expectations in the fourth quarter of last year, and there are forecasts that operating profit will also grow this year due to the continued strength of its logistics business and a rebound in resource prices. Additionally, expectations are expanding regarding the potential listing of Pantos after the spin-off, the expansion of new businesses and synergies, and the enhancement of shareholder value.

According to LG's plan for a spin-off, LG Corporation is scheduled to be separated as a major subsidiary of the newly established holding company. Dongyang Kim, a researcher at NH Investment & Securities, analyzed in a report on the 11th, “Although securing external customers after the spin-off remains a challenge, rapid decision-making, the potential listing of Pantos, LG Corporation’s pursuit of new businesses, synergy expansion within the new holding company, and strengthening shareholder value are all positive factors.”

This year’s operating profit is also estimated to reach 219.6 billion KRW, surpassing 200 billion KRW for the first time since 2017, driven by the continued strength of the logistics business and the sharp rise in coal and palm prices since the end of last year. Researcher Kim explained, “While expanding the coal business is difficult due to the spread of socially responsible investment, new business initiatives such as LNG terminal projects and healthcare, as well as synergy promotion within the new holding company based on logistics and trading functions, are expected. Reflecting the upward revision of earnings forecasts due to rising resource prices and a reduction in the target discount rate (from 40% to 30%), the target stock price has been raised to 33,000 KRW.”

LG Corporation’s sales in the fourth quarter of last year are estimated to have increased by 2% compared to the same period last year, reaching 2.6543 trillion KRW, and operating profit surged by 2,428% to 41.9 billion KRW, exceeding market expectations. Researcher Kim explained, “The logistics business maintained strong performance due to sustained volume and freight rate strength despite early year-end logistics responses in the previous quarter. The energy and palm businesses saw expanded profits due to the rebound in palm prices, and the coal business turned around thanks to the rebound in coal prices.”

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