[Infostock Daily= Reporter An Hoe Hyun] KB Securities expects LG Electronics' operating profit to reach a record high in the fourth quarter(October to December) of this year.
As a result, the company's investment opinion was 'Buy' and the target stock price was kept at 120,000 won.
"The reason why LG Electronics continued to fluctuate around 90,000 won in October, down 8.6% from its previous high point(98,900 won on Oct. 8) is because LG Electronics posted a performance shock in the fourth quarter due to increased marketing and inventory management costs over the past decade, reflecting performance concerns," the company explained, adding, "However, concerns over earnings are expected to remain groundless, as operating profit in the fourth quarter of this year is estimated to increase 5.4 times year-on-year and reach a record high of 551.6 billion won as of the fourth quarter."
It is estimated that the operating profit of the HE division in the fourth quarter of this year will double to 203 billion won compared to the previous year. Thanks to strong TV shipments. The deficit of vehicle component solution(VS) was estimated at 18.4 billion won. The deficit is a sharp drop from 202.5 billion won in the second quarter and 74.3 billion won in the third quarter.
"The VS sector is expected to expand its visibility into the surplus by breaking away from the deficit structure from next year," the company explained, adding, "GM, a strategic customer, is expected to expand the launch of electric vehicles to increase orders for pure electric vehicle parts with good profit margins and eliminate costs related to low-priced projects after the fourth quarter of this year."
Reporter An Hoe Hyun ahh@infostock.co.kr
