Samsung Electronics·LG Electronics 4Q Earnings’Better’ Prospects… Thanks to semiconductors and home appliances

Input 2021.01.06 10:29 | Revision 2021.01.06 10:42

Samsung Electronics (005930)Wow LG Electronics (066570)Will announce the provisional results for the fourth quarter of 2020 on the 8th. It seems that it will be somewhat slower than in the third quarter, but it is evaluated that it has saved itself even in the midst of the new coronavirus infection (Corona 19).

According to F&Guide, a financial information company on the 6th, Samsung Electronics’ 4Q 2020 earnings consensus (average of stock price forecasts) was 61,287.8 billion won in sales and 9,543.8 billion won in operating profit. This is an increase of 2.51% and 33.29%, respectively, compared to the same period last year.

Compared to the record-high quarterly performance of sets and parts in the third quarter of last year, sales decreased by about 5 trillion won and operating profit by about 2.6 trillion won. Annual results are expected to achieve sales of 237.3 trillion won and operating profit of 36,685 trillion won.

Samsung Electronics’ 4Q results were again led by semiconductors. In 4Q, the device solution (DS) division’s operating profit is expected to reach 4.100 trillion won to 4.5 trillion won. Compared to 3,450 billion won in the same period of the previous year, it increased by about 700 billion to 1 trillion won, but it is lower than 5,540 billion won in the previous quarter.

The IT and mobile (IM) division, where smartphones are the main focus, is expected to have an operating profit of 2.4 trillion to 2.5 trillion won, similar to last year. It is predicted that operating profit is expected to decrease by about 2 trillion won compared to 4.5 trillion won in the previous quarter due to a blockade (lockdown) issued by the corona re-proliferation in Europe and an increase in marketing costs.

In the consumer electronics (CE) division, which includes TV and household appliances, the operating profit for the fourth quarter is estimated to be between 800 billion and 1.2 trillion won, similar to the same period last year (810 billion won). Compared to the third quarter, which had the effect of corona pent-up (explosion of suppressed demand), it was a little behind, but it is evaluated that it was a good thing considering the decrease in sales volume due to European lockdown and the increase in display panel prices.

LG Electronics is also expected to see good results in 4Q. LG Electronics has traditionally had a jinx of ‘Sanggo Ha-Je’, which has been performing well in the first half and sluggish in the second half, but it is interpreted that it broke the jinx last year. For the first time in history, annual operating profit of 3 trillion won is considered to be the dominant.

F&Guide predicted that LG Electronics will generate sales of 17,8603 trillion won and operating profit of 6198 billion won in the fourth quarter of 2020. Compared to the same period of the previous year, sales increased by 11.2% and operating profit by 508.83%. Annual sales are estimated at 62,6262 billion won and operating profit at 3,205.8 billion won.

LGE’s 4Q results have been deteriorating repeatedly as promotions are expanding, usually with the arrival of the year-end consumption season. However, this year’s profitability is expected to improve as online sales of home appliances and TVs increase due to Corona 19. It is believed that the popularity of stylers (clothing managers), dryers, dishwashers, etc., which are called new home appliances, and the increase in sales of OLED (organic light-emitting diode) TVs, led the performance.

The smartphone business, which is due to the loss, is also expected to reduce losses due to increased sales of low-end products in North America and Central and South America. As for the battlefield, it is expected to reduce the deficit as the European and North American auto markets are on the rise.

Choi Bo-young, a researcher at Kyobo Securities, said, “LG Electronics was the most important in its steady performance in the steady performance of new sanitary home appliances such as steam cleaners due to the corona effect of the H&A (home appliance) division.” “The effect of improving the cost structure and improving production efficiency will be reflected in the earnings.”