[Infostock Daily= Reporter An Hoe Hyun] Korea Investment & Securities said on the 25th that LG Household & Health Care is expected to perform well thanks to the recovery of cosmetics and strong household goods, maintaining its 'BUY' investment opinion and raising its target share price by 4.8% from 1.67 million won to 1.75 million won.
Korea Investment & Securities expected LG Household & Health Care's third-quarter operating profit to reach 312 billion won, similar to the same period a year earlier. The drop in operating profit ratio in the cosmetics sector is only 1.3% points, and profitability in the household goods sector is expected to improve 3.2% points, with the overall operating profit ratio also expected to reach 15.8%, similar to the previous year.
"The operating profit of cosmetics is expected to fall 16% to 179 billion won as profitability management and sales in China recover," the company said, adding, "The Chinese cosmetics market is the fastest resilient among major global markets."
Operating profit for household goods is estimated at 73 billion won, up 60% from a year earlier, due to continued positive performance in the first half. This year, the household goods sector has been doing well due to the expansion of personal care business due to increased demand for sanitary products and strengthened body · hair care and skin improvement cosmetics. Profitability is also improving due to high growth of online channels. Operating profit in the food and beverage sector is estimated at 60 billion won, up 10% from a year earlier.
Reporter An Hoe Hyun ahh@infostock.co.kr
