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[Alpha Biz=(Chicago) Reporter Paul Lee] Meritz Securities said of LG Electronics on the 29th, "Next year is expected to be a period in which annual performance growth is possible along with a rebound in seasonal performance in the first half of the year," adding, "At this point, with all risks such as subsidiary capital raising and slowing performance in the fourth quarter disclosed, the downside outlook is expected to be low." "We need to pay more attention to the upside," Meritz Securities said.
The investment opinion was maintained as a buy, and the target price was lowered to 140,000 won to reflect the decline in the corporate value of the subsidiary.
Meritz Securities said, "The fourth-quarter operating profit is expected to be 456.9 billion won, less than 37% below the consensus. On a separate basis, we expect a slight deficit in four quarters."
"LG Electronics' major items such as home appliances, TVs and laptops have not improved demand after supplementing inventory in the second and third quarters," Meritz Securities said. "In particular, demand for premium products such as organic light emitting diode (OLED) TVs is slowing down, which is expected to lead to worsening mix and marketing costs."
"We expect operating profit to increase 18 percent year-on-year to 3.4097 trillion won next year," Meritz Securities said. "Sales of the consumer electronics (VS) division, the core of LG Electronics' mid- to long-term growth, will increase 20 percent year-on-year to 12.2 trillion won, and operating profit will increase 179 percent to 526.2 billion won."
AlphaBIZ 폴 리(hoondork1977@alphabiz.co.kr)
