KB Securities expects LG to achieve earnings improvement and stock price increase in the first half of the year due to strong performance of its subsidiaries.
Analysts say that the performance of major subsidiaries of LG Electronics and LG Chem continue to improve, and the performance of consolidated subsidiaries such as LG CNS and S&I Corp are also showing significant improvement.
KB Securities raised its target price to KRW 150,000 along with its 'buy' opinion on LG.
KB Securities noted that 'earning surprise' collected by LG in the first quarter was due to strong performance in all business sectors.
LG Electronics collected record-high quarterly earnings on the back of rising display panel prices, while LG Chem also posted an earnings surprise on the back of increased sales of petrochemical products and improved battery profitability.
LG CNS, a subsidiary subject to consolidation, saw its operating profit more than double year-on-year due to increased smart logistics, cloud conversion and deployment businesses.
S&I Corp also saw its sales and profits increase thanks to domestic and overseas facility investments by its affiliates, including the expansion of LG Display's Paju plant.
LG collected 2.18 trillion won in sales and 1.9 trillion won in operating profit in the first quarter, up 37.5 percent and 64.7 percent year-on-year, respectively, and far exceeding market expectations, reflecting 100 billion won in one-off profit from the sale of real estate
Reporter Lee Dong-hoon usinvestmentidea2020@gmail.com
