[Click eStock] "LG Electronics, 2Q Preliminary Earnings Hold Up Against Concerns"

[Asia Economy Reporter Lee Jung-yoon] Hana Securities maintained its buy rating and target price of 170,000 KRW for LG Electronics on the 8th, stating that the company's preliminary second-quarter earnings performed better than expected despite concerns.

LG Electronics' preliminary second-quarter revenue was 19.472 trillion KRW, up 15% year-on-year, while preliminary operating profit was 791.7 billion KRW, down 12%. These results fell short of consensus estimates by 0.3% and 5.7%, respectively, reflecting disappointing performance.

By segment, the H&A division is estimated to have delivered results similar to Hana Securities' previous forecasts, supported by sustained premium-focused demand despite a contraction in the home appliance market. This particularly demonstrated the strong premium brand image within the home appliance sector. The HE division is believed to have recorded a loss for the first time in 30 quarters due to a sharp decline in TV market demand, which was a major factor causing the second-quarter results to fall below estimates. The VS division saw smoother-than-expected supply to customers due to easing vehicle semiconductor supply constraints, with revenue exceeding 2 trillion KRW and operating profit estimated around 30 billion KRW. The BS division is estimated to have fallen short of previous revenue and operating profit forecasts due to weakening demand for laptops and other products.

Kim Rok-ho, a researcher at Hana Securities, explained, "LG Electronics' second-quarter results, excluding TVs, performed better than concerns suggested, and it is encouraging that the premium position in home appliances was reaffirmed." He added, "The VS division's return to profitability is a basis for reflecting the value of this business unit," and further noted, "With an order backlog exceeding 60 trillion KRW, the profitability turnaround of a business unit with high visibility for external growth is expected to justify a valuation premium."

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