[서울=뉴스핌] Reporter Se-won Kim = NH Investment & Securities predicted that LG Electronics will increase its corporate value due to the withdrawal of the smartphone business on the 6th. Accordingly, we maintained our BUY rating and raised our target price from KRW 190,000 to KRW 210,000.
Earlier, LG Electronics announced that it had decided to hold the board of directors the day before and completely withdraw the MC (mobile communication) business headquarters, which is in charge of the smartphone business.
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Jeong-woo Ko, a researcher at NH Investment & Securities said, “LG Electronics’ smartphone business was a negative factor for earnings and stock prices.” That’s because” he explained.
Researcher Ko continued, “It is judged that the era of growth of all companies in the smartphone market has already passed, so it can be seen that the potential growth potential of LG Electronics, which can be viewed as a Niche Player, has been further reduced than in the past.” Considering the difficult smartphone industry environment, we positively evaluate LG Electronics’ withdrawal of the smartphone business.”
Researcher Ko expected that with the withdrawal of the smartphone business, LG Electronics’ corporate value would be re-evaluated and investment attractiveness would increase. This is because, in addition to the withdrawal of the smartphone business, which has been a factor in valuation discounts, the business presence of home appliances, TVs, and electronic components with structural growth stories can be highlighted.
NH Investment & Securities predicts that LG Electronics’ operating profit this year will increase to around 4 trillion won level with the withdrawal of the smartphone business.
Researcher Go said, “At this point, it is difficult to estimate the loss related to the smartphone business, but the scale will be at least 6495 billion won.” On the other hand, operating profit is expected to increase from 3.6 trillion won to 4.2 trillion won.”