[Click eStock] "LG Electronics, Synergy in Future Business of Communication Patents... Target Price Up"

[Asia Economy Reporter Son Sunhee] KB Securities announced on the 23rd that it is raising the target price for LG Electronics to 160,000 KRW. This is a 23% increase from the target price of 130,000 KRW presented on January 30, less than a month ago.

LG Electronics is the third-largest company globally in telecommunications patents. Even after withdrawing from the smartphone business in 2021, it has continued research and development in communication technology and currently holds about 30,000 telecommunications patents (4G, 5G, 6G). More than one-third of these patents are rated S and A in patent evaluations. LG Electronics is expected to enhance synergy between its telecommunications patents and future growth areas such as the Vehicle Solutions (VS) sector, autonomous driving, robotics, and home appliance Internet of Things (IoT) businesses, and in the mid to long term, it is anticipated to monetize its intellectual property (IP).

Additionally, LG Electronics’ VS business is projected to reach an order backlog of 100 trillion KRW by the end of this year, alongside the expansion of the autonomous electric vehicle market. As autonomous driving features in electric vehicles increase, orders for IVI (In-Vehicle Infotainment) systems that combine communication modules and displays are exceeding expectations, and LG Magna Powertrain is seeing a significant rise in orders for motors and drivetrains from electric vehicle manufacturers.

This year, the VS business’s operating profit is estimated to nearly double from the previous year to 335.7 billion KRW. The operating profit ratio is expected to increase to 8.3% of the total, up from 4.9% last year, indicating an expanded contribution to overall profits.

Dongwon Kim, a researcher at KB Securities, said, "Despite the recent upward trend, the current LG Electronics stock price is considered to not fully reflect the growth value of the VS business." He added, "LG Electronics’ standalone operating profit this year is estimated at 2.7 trillion KRW, a 110% increase compared to the previous year excluding one-time gains last year, making it a representative stock with improved earnings." He further stated, "As the absolute leader in telecommunications patents, LG Electronics is expected to leverage its 30,000 patents to enhance clear synergies with future businesses such as VS, autonomous driving, IoT, and robotics, and to pursue patent monetization in the mid to long term."

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