IBK Investment & Securities is estimating that LG Electronics will break its best quarterly performance in second quarter of this year. As a result, the securities raised the target price from 190,000 won to 220,000 won and maintained its investment opinion of 'Buy'.
Earlier, LG Electronics announced that it recorded consolidated sales of 18.8095 trillion won and operating profit of 1.51666 trillion won in the first quarter of this year. Compared to the same period last year, it increased by 27.7% and 39.1%, respectively.
The consensus of securities firms (market expectations) also exceeded. Home appliances, TVs, and electronics sectors performed well, while the mobile sector declined year-on-year.
"The mobile communication (MC) division, which had incurred losses, will be excluded in the second quarter result as its operation discontinued. The Q2 earnings performance is expected to improve significantly due to the base effect," the securities firm said. "LG Electronics' sales in the second quarter are expected to rise 33.7% year-on-year to KRW 15.3051 trillion and operating profit more than doubled to 1.71 trillion won."
The securities explained. "The H&A (living appliances), HE (TV) and VS (field) divisions are also expected to improve their performance compared to the same period last year.".
It is estimated that annual operating profit will reach 2 trillion 6,000 and more than 1 trillion won, respectively, as H&A and HE divisions continue to grow steadily. The operating profit of the two divisions is expected to reach 3 trillion won annually.
Reporter Lee Dong-hoon usinvestmentidea2020@gmail.com
