[Click eStock] LG Electronics to Decide Direction of Mobile Phone Business... "An Opportunity to Resolve Uncertainty"

Partial Sale and Withdrawal Considered... "Opportunity to Resolve Two Months of Uncertainty"

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[Asia Economy Reporter Minwoo Lee] LG Electronics is expected to decide the direction of its smartphone (MC) business division next month. Since the MC division has been continuously operating at a loss, this is seen as a clear opportunity to resolve uncertainties.

On the 19th, KB Securities analyzed the disposition of LG Electronics' MC business division in this way. According to industry sources, LG Electronics is expected to hold a board meeting in early next month to decide the direction of the MC division. After internalizing core mobile technologies and patents, the company is reportedly considering separating and selling overseas production plants. If selling the production lines proves difficult, a complete withdrawal from the business is also being considered.

If the decision is made to withdraw from the business, the relocation of MC division personnel (3,700 employees) is expected to proceed. As these employees are reassigned to various affiliates within the group such as LG Energy Solution, LG Uplus, LG Magna e-Powertrain, and LG Electronics VS division, it is anticipated that, excluding voluntary retirement personnel, the departure of key technical staff will be limited.

Regardless of whether the business direction involves sale or withdrawal, it is expected to serve as a clear opportunity to resolve ongoing concerns about losses and uncertainties in the MC business. The MC division has recorded losses amounting to approximately 5 trillion won over the past six years.

Dongwon Kim, a researcher at KB Securities, stated, "Since the LG Electronics CEO officially announced the consideration of withdrawing from the smartphone (MC) business in an email to employees on January 20, various opinions on the MC business restructuring have been circulating in the market for over two months, amplifying uncertainties amid mixed expectations and concerns. Assuming the business withdrawal is formalized regardless of the MC business direction, the MC business, which incurs an annual loss of 1 trillion won, could contribute to earnings improvement, positively affecting LG Electronics' corporate value going forward."

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