LG Household & Health Care Achieves 64 Consecutive Quarters of Profit Growth... What’s the Secret?

[Asia Economy Reporter Ji-hwan Park] Yuanta Securities maintained a 'Buy' rating and a target price of 2 million KRW for LG Household & Health Care on the 24th, citing 64 consecutive quarters of profit growth. This was attributed to strong growth in the cosmetics segment driven by robust demand in China and an unexpected increase in performance in the household goods and beverage segments, which were previously expected to see profit declines.

Researcher Eun-jung Park of Yuanta Securities stated, "LG Household & Health Care's consolidated sales for Q1 increased by 7% year-on-year to 3.67 trillion KRW, and operating profit rose by 11% to 370.6 billion KRW," adding, "This slightly exceeded market expectations." The cosmetics segment, which has strong demand from China, led the growth, and both sales and profits increased in the household goods and beverage segments, despite expectations of profit declines due to a high base effect in the same period last year.

Researcher Park emphasized, "Profits increased year-on-year across all segments, with profit growth continuing for 64 consecutive quarters," and added, "No external shock can stop LG Household & Health Care's profit growth."

The cosmetics segment recorded sales of 1.2 trillion KRW, up 9% year-on-year, and operating profit of 254.2 billion KRW, up 15%. Researcher Park explained, "Strong consumption in China, sustained preference for Whoo, and strong performance in duty-free and China markets contributed to this growth." During the same period, the household goods segment posted sales of 520 billion KRW and operating profit of 66.2 billion KRW, increasing by 9% and 1%, respectively, year-on-year. The beverage segment also saw sales and operating profit rise by 2% and 7%, respectively.

There is an assessment that the stock price could rise at any time. Researcher Park analyzed, "Despite strong performance, LG Household & Health Care's absolute return since the beginning of the year is only 6%, underperforming the KOSPI return by 16 percentage points." He emphasized, "This earnings report reaffirmed Whoo's dominance in Asia and the profit-generating capability of all business divisions."

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