Samsung·LG Electronics,’Good for Corona’…Predicting Extraordinary Night Performance This Year (Overall)

Samsung Electronics and LG Electronics achieved unprecedentedly high operating profits from the Corona 19 pandemic last year. The industry predicts that both companies will continue to perform well this year.

Samsung Electronics is expected to record 46 trillion won in operating profit in 2018, the highest boom in history, and LG Electronics is expected to record 4 trillion won for the first time. It is an analysis that semiconductors and home appliances, which are the main divisions of each company, will lead to improved performance due to the spread of’untact culture’ according to Corona 19.

Samsung Electronics,’Semiconductor Supercycle’ Increasing Operating Profit

According to Samsung Electronics’ provisional performance announcement on the 10th, sales in the fourth quarter of last year were 61 trillion won and operating profit was 9 trillion won. Compared to the same period last year, sales increased 1.87% and operating profit increased 25.7%.

Although the division’s earnings were not announced, it is estimated to be 4.3 trillion won in the semiconductor (DS) sector, 2.3 trillion won in the IT and mobile (IM) sectors, and 800 billion won in the consumer electronics (CE) sector.

Annually, the sales amount is 236 trillion won and the operating profit is 35.9 trillion won. Compared to 2019, sales increased by 2.5% and operating profit increased by 29.5%. The main effect was that the demand for semiconductors increased due to the transition to non-face-to-face due to the Corona 19 last year.

It is expected to surpass last year’s performance this year as well. Stock prices are observing sales of 245 trillion won to 250 trillion won and operating profit of 44 trillion won to 48 trillion won this year. It is close to the record high performance in 2018 (sales of 243 trillion 771.4 billion won, operating profit of 58,866.7 billion won).

This is based on several good news, such as the semiconductor supercycle. From this month, memory semiconductor prices such as DRAM and NAND flash are rising, and foundries (consignment production) are also booming as supply shortages are deepening worldwide.

Accordingly, the proportion of semiconductors in Samsung Electronics’ operating profit is expected to increase further. The semiconductor division’s operating profit in the third quarter of last year was 50% of the total operating profit, and in the fourth quarter it was 55%. The semiconductor division’s operating profit forecast this year is expected to be 30 trillion won, accounting for 67% of the total operating profit (46 trillion won).

During the same period, it is expected that the IM division will generate 12 trillion won and the CE division will generate 3 trillion won.

In the first quarter of this year, it is expected to generate operating profits of 9.5 trillion to 10 trillion won, similar to the fourth quarter of last year. New products such as the Galaxy S21 this month and the Neo QLED TV are scheduled to be released in March, which is expected to lead to improved earnings. DRAM prices are expected to rise in earnest from 2Q.

LG Electronics likely to break new records in sales and operating profit this year

LG Electronics announced that its sales in the fourth quarter of last year were 18,782.6 billion won, and its operating profit was estimated at 647 billion won. Compared to the same period of the previous year, it increased by 16.9% and 535.6%, respectively.

By division, the household appliances (H&A) and TV (HE) divisions generated operating profits of 400 billion won and 200 billion won, respectively, while the electrical equipment (VS) and mobile (MC) divisions recorded losses of 30 billion and 200 billion won, respectively. Is estimated.

Annual sales amounted to 63,2638 billion won and operating profit of 3,191.8 billion won. Compared to 2019, this is an increase of 1.5% and 31%, all of which are all-time highs. This is the first time that the annual operating profit has exceeded 3 trillion won. It is evaluated that the H&A and HE divisions have been active thanks to the demand for pent up (repressed) caused by Corona 19.

In the market, LG Electronics is expected to rewrite a new record this year. Sales are expected to reach 67 trillion won to 68 trillion won and operating profit is expected to reach 3.4 trillion won to 4 trillion won. It is expected that the home appliance division will produce solid results and the electronic component (VS) division will turn into a surplus under the influence of COVID-19 pent-up demand. In the first quarter, sales are expected to be 15 trillion won to 16 trillion won and operating profit will be 10 to 12 trillion won.

Kwon Seong-ryul, a researcher at DB Financial Investment & Securities, said, “Even if there is no corona special in the home appliance and TV sectors, good profitability can be maintained by improving the product mix.”