[Click eStock] "LG Electronics, B2B Business Performance Gains Momentum"

Kiwoom Securities maintained a buy rating and a target price of 160,000 KRW on LG Electronics on the 9th, stating that the performance of new business-to-business (B2B) ventures such as robots and electric vehicle charging infrastructure is gaining momentum.

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LG Electronics is expected to maintain superior profit momentum within the electric and electronics sector in the second quarter, following the first quarter of this year. A favorable cost structure is expected to continue, and logistics cost burdens are anticipated to improve further not only in maritime transport but also in land transport. The estimated standalone operating profit for the second quarter is 1.005 trillion KRW, a 95% increase compared to the same period last year, and with IT set demand recovering in the second half, profit growth is projected to continue year-over-year.

Ji-san Kim, a researcher at Kiwoom Securities, explained, "From the perspective of each business division, the home appliances segment’s strategy to target volume zones and strong B2B sales are positively impacting not only revenue but also profitability," adding, "This is the secret to widening the performance gap with competitors in a weak demand environment." As the proportion of B2B sales in system air conditioners, air conditioning systems, and built-in home appliances increases, the seasonality of performance is also expected to be mitigated.

Regarding the TV segment, attention should be paid to the results of the platform business. Researcher Kim stated, "The number of clients based on WebOS is expected to reach 300 companies this year," and added, "The platform business, as a stable source of revenue through content and advertising, will be a factor that enhances profit quality and corporate value."

The automotive parts division’s new plant in Mexico is expected to become a key growth hub. Once it begins full-scale operations in the second half, it will provide an opportunity to proactively respond to new electric vehicle platforms from North American clients, and the growth of the e-powertrain is expected to expand. The e-powertrain is anticipated to achieve an average annual growth rate of 50% for the time being.

The business solutions segment is seeing the performance of new businesses such as robots and electric vehicle charging infrastructure gain traction, with B2B orders for professional service robots being secured and a mass production line for rapid chargers established, according to analysis.

Researcher Kim said, "LG Electronics is transforming from a business-to-consumer (B2C) focused company to a B2B enterprise," and added, "As early as 2025, automotive parts are expected to become the second-largest business division in terms of sales, following home appliances." He further explained, "Home appliances are strategically aiming for B2B appliances, smart appliances, and upgraded appliances, and the TV platform business is also in the B2B domain," adding, "Robots aim to become a comprehensive solution provider for service robots. It is necessary to view LG Electronics beyond the fixed perspective of a consumer electronics and TV company."

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