[아이뉴스24 김종성 기자] When LG Electronics decided to establish a joint venture (JV) for manufacturing electric vehicle parts worth KRW 1 trillion with Magna International, the world’s third-largest auto parts maker, the stock price raised its target price by pouring out favorable reviews at once.
Market experts are agreeing that the growth of LG Electronics’ electronics business will accelerate and the corporate value will be reevaluated.
According to the financial investment industry on the 25th, the news of the establishment of’LG Magna e-Powertrain’ (tentative name) has led to favorable reviews of LG Electronics, with 8 out of 9 securities companies raising their target price.
Meritz Securities raised its target price from 120,000 won to 167,000 won, giving the most positive outlook. E-Best Investment & Securities raised the target price from 112,000 won to 158,000 won, Hana Financial Investment raised the target price from 125,000 won to 153,000 won, and Kyobo Securities also raised from 120,000 won to 150,000 won.
In addition, Shinhan Investment & Securities (144,000 won), Eugene Investment & Securities (140,000 won), Samsung Securities (140,000 won), and Korea Investment & Securities (140,000 won) also joined the ranks of LG Electronics’ target raising.
Securities companies believe that the establishment of a joint venture between LG Electronics and Magna will not only normalize the electronic parts business, but also highlight synergy with Magna, which will serve as a momentum for future share price rise.
On the 23rd, LG Electronics announced on the 23rd that it would establish’LG Magna E-Powertrain’ by dividing parts of parts such as motors and inverters as well as battery and battery pack parts business to expand the electric vehicle parts business and strengthen competitiveness. Magna International will acquire a 49% stake (51.6 billion won) in LG Electronics’ new subsidiary through an Austrian affiliate.
LG Electronics is expected to be able to expand its order-taking channels to Europe and China, in addition to its already secured OEM customers in North America through the establishment of a joint venture with Magna, the world’s third largest auto parts maker.
In particular, expectations are growing that a new joint venture can supply parts to Apple’s self-driving electric vehicles.
Cho Cheol-hee, a researcher at Korea Investment & Securities Co., said, “This joint venture is expected to create synergy between LG Electronics’ motor and inverter manufacturing competitiveness, Magna’s electric vehicle drive system integration capability, and sales power such as European OEMs.” As it is mentioned, expectations for the expansion of customer companies including Apple Cars are increasing.”
Above all, the prospect that the electronics division, which has continued to suffer losses, will turn to the black from next year and the corporate value will be completely re-evaluated is the main reason for raising the LGE target for securities prices. The prospect that LG Electronics will record its record high next year is also playing a part.
Choi Bo-young, a researcher at Kyobo Securities, said, “Amid the reinforcement of the autonomous driving trend, LG Electronics’ electronics division is expected to turn to a surplus next year.” Said.
Kyung-Tak Noh, a researcher at Eugene Investment & Securities, estimates that LG Electronics’ operating profit for next year will increase by 18.1% from this year to KRW 3.84 trillion, the highest ever.
Researcher Roh said, “Sturdy demand for premium home appliances and TVs due to changes in life trends and polarization of consumption due to Corona 19, increased supply of electronic parts due to full-fledged electric vehicle projects, increased proportion of smartphone manufacturers development and production (ODM), and cost structure due to factory relocation. “The performance will improve significantly thanks to improvement,” he explained.
Reporter Kim Jong-seong [email protected]