[Infostock Daily= Reporter An Hoe Hyun] Samsung Securities said on the 21st that LG's net asset value(NAV) reflection rate has soared since December 23 last year, evaluating the electric vehicle business as LG Group's business. The investment opinion maintained 'BUY' and raised the target stock price by 31% from 102,000 won to 135,000 won.
"The reason for the rise in LG's NAV reflection rate is that the market began to evaluate the electric vehicle-related business as a business of LG Group, including LG Electronics and LG Chem, after LG Electronics' decision to establish a joint venture with Magna," the company explained, adding, "Chairman Koo Kwang-mo's frequent exposure to mergers and acquisitions(M&A) also reflected investors' expectations for new leadership."
"We don't expect LG's reflection rate to drop significantly to the same level as in the past, and from a global perspective, the news flow related to electric vehicles is likely to continue in the future," the company explained, adding, "This is because LG's net cash has risen to 1.8 trillion won as of the end of the third quarter of last year, and LG is likely to acquire new growth-related companies directly, not through subsidiaries." Furthermore, "In this situation, the discount rate against NAV is still high at 60%, so despite the rise in stock prices, the burden of buying is not big," the company analyzed.
Reporter An Hoe Hyun ahh@infostock.co.kr
