[Click eStock] "LG Electronics, 1Q Earnings Surprise Expectations Rise"

Securing Total Electric Vehicle Solutions Including Powertrain, Lamp, and Charging Module
Expected to Emerge as a Leading Company in the Electric Vehicle Ecosystem

[Asia Economy Reporter Minwoo Lee] LG Electronics is expected to post surprise earnings in the first quarter of this year. This is because it is transforming into an electric vehicle company with secured future growth potential, and various order performances are also expected to reach an all-time high.

On the 17th, KB Securities maintained its 'Buy' rating on LG Electronics with this background and raised the target price by 10% to 220,000 KRW. The closing price the previous day was 172,500 KRW.

This is because orders for automotive components (VS) are expected to increase to around 60 trillion KRW this year, with orders from Austria's ZKW expected to reach a record high of about 11 trillion KRW. Due to the expansion of premium home appliances sales in the Home Appliance & Air Solution (H&A) and TV (HE) sectors, the estimated operating profit for the first quarter is expected to be the highest ever (1.14 trillion KRW), surpassing the first quarter of last year.

It is also positive that LG Electronics is emerging as a major player in the electric vehicle industry. Having secured core electric vehicle components and mass production capabilities, LG Electronics is expected to be recognized as an attractive collaboration partner by the world's largest technology companies such as Apple, Microsoft (MS), and Google. Accordingly, Dongwon Kim, a researcher at KB Securities, predicted that LG Electronics will lead the formation of the global electric vehicle market ecosystem.

Researcher Kim said, "After establishing a joint venture with Canada's Magna, LG Electronics secured electric vehicle powertrain technology, and along with ZKW (vehicle lamps) and VS (electric vehicle charging modules, infotainment), it has secured mass production capabilities for electric vehicles." He explained, "Based on strategic collaboration and efficient value chain construction with affiliates such as LG Chem, LG Display, and LG Innotek in batteries, displays, and automotive components, it is possible to supply total electric vehicle solutions to Apple and mega technology companies in the global electric vehicle market."

The strategic changes in the smartphone (MC) division are also noteworthy. This is because the MC division, which has recorded an operating loss of 5 trillion KRW over six years since 2015, is expected to be sold, withdrawn, or downsized. Assuming no losses in the MC division, it is analyzed that the annual profit increase effect will be about 800 billion to 1 trillion KRW, and LG Electronics' corporate value will increase by about 10 trillion KRW in the future. Researcher Kim explained, "Outwardly, LG Electronics' MC division accounts for only 1% of the global market share and is a loss-making division, but considering core patents (ranked 3rd globally in smartphone patents, with 1,700 patents for 5G phones), the business value is judged to be relatively large."

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