Post-corona era, fostering a perfect future business… Accelerate business restructuring
LG Electronics target price of KRW 200,000 appears in’Review of mobile business withdrawal’
![The statement that LG Electronics is reviewing all plans, including the sale of its mobile (MC) division, which has recorded a deficit for several years on the 20th, is read as the result of LG Group Chairman Kwang-mo Koo's cold judgment on future competitiveness. [사진=LG 제공]](https://i0.wp.com/news.google.com/news/photo/202101/67242_39437_00.jpg?w=560&ssl=1)
[오늘경제 = 최주혁 / 임주하 기자]
The statement that LG Electronics is reviewing all plans, including the sale of its mobile (MC) division, which has recorded a deficit for several years on the 20th, is read as the result of LG Group Chairman Kwang-mo Koo’s cold judgment on future competitiveness.
Since the so-called’non-face-to-face economy’ era has become a necessity rather than an option amid the spread of coronavirus,’selection and concentration’ is essential for LG Electronics to lead the 4th industrial revolution and establish itself as a’global economy-oriented company’. It was recognized as necessary.
Since taking office in 2018, LG Chairman Kwang-mo Koo has ordered to spur’Digital Transformation’ as a key means of creating customer value. As a result, in addition to the existing main businesses such as home appliances and chemicals, artificial intelligence (AI), robots, electronic devices, and electric vehicle batteries are being used as new core businesses of the group and investment is expanding.
The business community predicts that in the future, LG Electronics will clean up its smartphone business, which is in a stagnant growth, and instead focus on expanding the electric field, AI, and robot business.
LG Electronics recently decided to establish a joint venture in the electric vehicle powertrain field with Canada’s Magna International (hereinafter referred to as Magna), the world’s third-largest auto parts maker, is its commitment to fostering the electric vehicle business as a major growth engine.
In the global automobile market, eco-friendly vehicles such as electric vehicles and hydrogen vehicles and autonomous vehicles equipped with advanced electronic devices are rapidly emerging as future businesses.
Through LG Energy Solutions, LG Electronics, LG Innotek, and LG Display, which were spun off by LG Chem, the LG Group has been reborn as a comprehensive electrical equipment company that encompasses electric vehicle batteries, vehicle infotainment, powertrain, vehicle display, and vehicle communication and lighting components. It has a business environment that can generate the best synergy in this field.
Kwon Bong-seok, CEO of LG Electronics, appeared at the Magna Press event held at CES 2021, the largest consumer electronics and IT exhibition in the United States, on the 11th of this month (local time) and said, “Our goal is to become one of the leading automotive parts and solution suppliers in the industry. “The automobile industry is one of the key drivers of LG’s future business portfolio.” He expressed his firm determination to grow the battlefield business.
In line with the digital transformation, LG Electronics recently acquired Alphonso Inc., a TV advertisement and data analysis startup headquartered in Silicon Valley, in the United States, and integrated the software business in the hardware-oriented business groups such as home appliances, TVs, and parts. I am trying to make another transformation.
AI and robots are the areas LG is working on with battlefields recently.
On the 7th of this month, LG Group launched’LG AI Research’, an artificial intelligence organization dedicated to 16 affiliates including LG Electronics, LG Display, LG Chem, LG Uplus, and LG CNS. At the group level, it is a will to secure the original AI technology and expand the AI business.
To this end, Hong-rak Lee (43), a professor at the University of Michigan in the United States, was recruited, a world-renowned AI scholar and former Google Brain, a Google AI research organization.
The business community expects that LG Electronics will soon make additional investments in fields such as battlefields, AI and robots, such as M&A and joint venture establishment. This is because LG Electronics desperately needs to grow food for the future. This is because the business community analyzes that LG has been preparing to withdraw from the mobile phone business since long ago.
When approached in this way, the MC division seems likely to sell all or part of it. The MC division has maintained an operating deficit for 23 consecutive quarters since the second quarter of 2015, and the cumulative operating deficit until the end of last year was 5 trillion won.
However, on the other hand, it is also analyzed that it will focus on reducing and reorganizing the business rather than selling the mobile business right away.
Smartphones are a key device in the IoT industry, which is the future growth engine. Can we completely give up smartphones in the future food market in the process of preoccupying future opportunities with innovative technologies such as digital transformation and artificial intelligence (AI)? The internal question is in line with this observation.
As such, LG Electronics’ mobile business, which had dominated the global mobile phone market with chocolate phones, Shine phones, and Prada phones, has been at the center of controversy as it has been pushed to the brink of sale after a loss of 5 consecutive years, but the market response is positive.
LG Electronics finished the transaction at the reported price of 167,000 won, up 12.84% from the previous trading day (146,500 won). It is analyzed that this is due to the increase in institutional purchases as negative factors that can degrade corporate value have been resolved.
At all, securities companies raised their target price to 200,000 won. According to the financial investment industry on the 21st, Samsung Securities (220,000 won), Korea Investment & Securities (220,000 won), Hi Investment & Securities (230,000 won), and Eugene Investment & Securities (220,000 won) raised LG Electronics’ target price to 200,000 won. Hyundai Motor Securities raised it from 105,000 won to 190,000 won.
“LG Electronics’ consolidated sales and operating profit in 2020 were 1.5% and 31.0, respectively, compared to the same period of the previous year, thanks to the increase in demand for premium eco-friendly home appliances due to Corona 19 and the increase in marketing cost efficiency due to the increase in non-face-to-face sales, % Increased to 62.3 trillion won and 3.2 trillion won,” he predicted. “The demand for eco-friendly products is expected to expand further this year, and accordingly, the company’s H&A, VS, BS business divisions are expected to continue to grow in appearance.” .
“We are overgrowing with new home appliances and transforming into a platform company based on our core solutions.” Here, the VS division secures opportunities in the eco-friendly automobile sector, and MC has limited adverse impact on LG Electronics’ earnings growth. It will be.
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