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[Alpha Biz=(Chicago) Reporter Paul Lee] Hyundai Motor Securities decided on the 20th that the emergence of cash cow other than home appliances will be difficult for LG Electronics in a short period of time. The target price was 140,000 won, and the investment opinion 'buy' was maintained.
Hyundai Motor Securities expects LG Electronics' consolidated sales including LG Innotek to rise 4.4% year-on-year to 21.3 trillion won in the first quarter thanks to the external growth of its consumer electronics (H & A) division and consumer electronics (VS) division.
However, operating profit is expected to fall 24.7% year-on-year to 1.12 trillion won due to falling profitability of home entertainment (HE) and H & A divisions.
Hyundai Motor Securities said, "The sluggishness of the HE division, which recorded high single profitability centered on OLED TV from 2017 to 2019, is unlikely to improve in the short term."
"In the case of LCD panels, the flexibility of display price cuts is likely to fall compared to the past as Chinese display makers dominate the market," said Hyundai Motor Securities Co. "OLED TV, which is leading the market, is unlikely to record the same growth rate as in the past."
Hyundai Motor Securities also expressed concern, saying, "It seems difficult for cash cows other than H & A to emerge in a short period of time as TVs enter a low-growth phase after the smartphone business is sorted out."
AlphaBIZ 폴 리(hoondork1977@alphabiz.co.kr)
