[Click eStock] "LG Draws Attention for Dividend Stability and Payout Ratio... Target Price Up"

On October 24, Hyundai Motor Securities evaluated LG, stating, "With the push to introduce separate taxation on dividend income, the stable trend in dividends per share and payout ratios is drawing attention." Accordingly, the target price was raised by 12% to 96,000 won, while maintaining a 'Buy' investment rating.

Kim Han-i, a researcher at Hyundai Motor Securities, explained, "Recently, the net asset value (NAV) has notably increased due to the rising value of LG Chem shares, a subsidiary of LG." He added, "LG Chem has signed a PRS contract worth 2 trillion won by leveraging its stake in LG Energy Solution, which is having a positive impact on securing funds and improving the financial structure." As of the end of September, the value of LG Chem's holdings increased by 2.6 trillion won, driving the overall NAV growth.

Furthermore, the company's standalone dividend payout ratio based on recurring profit is expected to remain above 60%, and it has consistently paid dividends exceeding this level. Kim emphasized, "It is attractive to investors searching for 'high-dividend companies' that are likely to be subject to the introduction of separate taxation on dividend income." Based on last year's dividend per share of 3,100 won, the annual dividend yield stands at 3.8%, demonstrating a stable dividend trend.

For the third quarter, consolidated results are expected to show sales of 2 trillion won and operating profit of 400 billion won, representing a 2.9% increase and a 15% decrease year-on-year, respectively. This reflects the impact of a decrease in equity-method gains from some subsidiaries and fluctuations in unrealized gains and losses.

Kim assessed, "Currently, the NAV stands at 29 trillion won, with the value of listed shares at 21 trillion won, accounting for 74% of the total NAV. The discount rate applied to the target price calculation is 48.5%, reflecting the historical low since the listing of LG CNS."

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