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[Alpha Biz=(Chicago) Reporter Kim Jisun] Meritz Securities said it expects the seasonal peak season effect for LG Electronics in the first half of this year.
The investment opinion remained 'buy', but the target price fell 7.14% to 130,000 won from the previous 140,000 won as the annual earnings forecast was slightly lowered. The closing price of LG Electronics is 94,000 won.
According to Meritz Securities, regarding LG Electronics' operating loss of 133.5 billion won in the fourth quarter of last year, the H & A division succeeded in external growth by offsetting sluggish demand with additional marketing costs, but operating losses expanded.
"The VS division maintained a surplus but posted sluggish profitability compared to sales growth due to performance bonuses, and the HE division was sluggish due to continued sluggish demand in the premium market even during the peak season," Meritz Securities said. "The expansion of investment in new businesses is a burden in terms of cost."
Meritz Securities Co. forecast LG Electronics' separate operating profit for the first quarter of this year to be 1.2227 trillion won, down 10 percent from a year earlier. Although the base effect from last year's high performance is burdensome, the amount of performance exceeds the average profit between 2018 and 2022.
Meritz Securities also forecast LG Electronics' overall operating profit for this year to be 3.524 trillion won, up 1.8 percent from a year earlier.
AlphaBIZ 김지선(stockmk2020@alphabiz.co.kr)
