“I’m going to 200,000 won”… LG Electronics reported rally for two consecutive days

LG Electronics’ stock price changed the reported price for two consecutive days. This is thanks to expectations for the electric vehicle parts business. The stock market has a rosy prospect that LG Electronics’ share price will exceed 200,000 won.

According to the Korea Exchange on the 29th, LG Electronics finished the transaction at 131,500 won, up 7,000 won (5.62%) on that day. Shares fell the next day after soaring to the price limit on the 23rd, but showed a strong trend again and ended at the highest price for two consecutive days based on the closing price.

The stock price began to rise as the news of the decision to establish a joint venture in the electric vehicle powertrain division with Magna International, the world’s third largest auto parts maker, was announced. In particular, on the day when the establishment of the joint venture was announced, it recorded the upper limit in 12 years, drawing attention from the market.

Foreigners and institutions intensively bought and raised the stock price. These months alone, LG Electronics’ stocks of 1.325.7 billion won and 1.219.8 trillion won respectively. This is in contrast to the fact that individuals sold 2,483.8 billion won during the same period.

The securities industry predicts that LG Electronics will continue to rise for the time being. In particular, it is raising the eye level at the same time, saying that the profits of the auto parts (VS) division, which are recording losses, will improve by entering the electric vehicle business.

According to F&Guide, the average target price of LG Electronics suggested by 8 domestic securities companies since the 23rd is 149,000 won. In particular, Nomura Securities, a Japanese investment bank (IB), has nearly doubled LG Electronics’ target price from KRW 110,000 to KRW 200,000.

Nomura Securities researcher Chung Chang-won said, “Uncertainty is reduced and hidden values ​​are revealed.” “It is expected that new value can be created in the fast-growing VS business. Through this, the value of LG Electronics’ VS business is currently estimated at 5.2 trillion won.” Analyzed.

Meritz Securities presented the most positive outlook among domestic securities companies by suggesting a target price of 167,000 won for LG Electronics. Joo Min-woo, a researcher at Meritz Securities, said, “Excluding electric vehicle powertrain (10% of next year’s sales), infotainment (60% of sales) and lighting (30% of) are expected to turn into profitable profits by 2021.” Consolidated sales are estimated at 5.6 trillion won next year, 7.5 trillion won next year, and 9.3 trillion won in 2022,” he explained. In addition, based on the turnaround of electronic components, the ROE of 15.2% is expected to surpass 13.7% of the return on equity (ROE) in 2017, and through cooperation with Magna, the base of global automakers is expected to expand.

“The establishment of a joint venture with Magna enhances the competitiveness of LG Electronics motors and inverters, and the market share in the powertrain market with high entry barriers such as diversification of customers can rapidly increase. It is necessary to re-evaluate the value of Korea,” he said. “Sturdy demand for premium home appliances and TVs due to changes in life trends and polarization of consumption due to coronavirus next year, increased supply of electronic parts due to full-scale electric vehicle projects, increased proportion of smartphone ODMs, and cost structure due to factory relocation The highest performance is expected in history due to improvement, etc.”

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