(Photo= Yonhap news)

 

[Alpha Biz= Reporter Kim Jisun] On the 22nd, NH Investment & Securities reiterated its "Buy" rating for LG Electronics and maintained its target price at 150,000 won.

The firm highlighted LG Electronics' recent establishment of a smart factory division, aiming for 1 trillion won in revenue and a 10% margin by 2030. NH Investment & Securities noted that the demand for smart factories is surging due to social issues, while competition remains manageable, presenting significant business opportunities.

NH Investment & Securities pointed out that LG Electronics created this division in January 2023 in response to labor shortages due to demographic challenges and shifting production bases to advanced economies, driven by trade wars and reshoring.

The firm emphasized LG's competitive edge lies in its extensive experience, having operated about 60 global factories over the past 70 years, which provides a strong foundation for its smart factory ventures. The global smart factory market is expected to grow from 129.7 billion dollars last year to 245.1 billion dollars by 2030, with a projected annual growth rate of around 12.7%.

NH Investment & Securities also noted that while major players in the smart factory sector include Germany's Siemens and Switzerland's ABB, the market is largely fragmented with numerous small to mid-sized IT solution providers, which suggests that LG Electronics has a competitive advantage. Key technologies for LG include digital twins, AI-based automation, and inspection platforms, with LG's ability to offer turnkey solutions from design through to post-production being a significant strength.

 

 

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