[Edaily Reporter kyoungeun kim ] HEUNGKUK METALTECH CO.,LTD. analyzed that three factors driving a revaluation of LG Corp.(003550)—a turnaround in earnings, strengthened shareholder returns, and a narrowing of the net asset value (NAV) discount—are all at play simultaneously. The firm maintained its “Buy” rating and target price of 135,000 won.
Park Jong-ryul, an analyst at Heungkuk Securities, stated in a report on the 26th, “LG Corp. is proving its commitment to shareholder returns through action, not just words,” adding, “Three drivers of revaluation—earnings recovery, enhanced shareholder returns, and a narrowing NAV discount—are all at work simultaneously.”
However, second-quarter standalone earnings are expected to show a somewhat disappointing trend, following the previous quarter, with operating revenue of 115.2 billion won (down 3.0% year-over-year) and operating profit of 39.6 billion won (down 2.4%). This is because, despite an increase in trademark licensing revenue driven by strong sales at affiliates such as LG Electronics and HANTECH LTD., these gains were offset by a decline in rental income from the sale of the Gwanghwamun Building and the base effect from dividend income.
On the other hand, on a consolidated basis, revenue is projected to reach 1.94 trillion won (up 7.9%) and operating profit 303 billion won (up 9.4%), indicating a strong performance that should make up for the previous quarter’s slump. This is driven by solid earnings improvements at consolidated subsidiaries such as LG CNS and D&O.
Analyst Park predicted that the second quarter would serve as an inflection point, with a reversal toward growth in consolidated operating profit becoming visible. He revised upward his 2026 forecasts to 8.112 trillion won (11.9%) in consolidated revenue and 1.311 trillion won (43.7%) in consolidated operating profit.
Analyst Park explained, “The key drivers are the high growth of LG CNS, along with improvements in dividend income and equity method income resulting from the earnings recovery of consolidated subsidiaries.” He added, “While subsidiaries in the electronics, telecommunications, and services sectors continue to generate stable profits, the recovery of the chemicals sector—which has been unable to escape a prolonged slump—will also gradually become apparent.” The improvement trend is expected to continue into the third quarter, and with the low base effect from the previous year adding to the momentum in the fourth quarter, the annual improvement in earnings is projected to widen further.
The most notable aspect is LG Corp.’s commitment to shareholder returns. LG Corp. has fully retired all of its 3.9% treasury stock (1.9% completed in September 2025 and 2.0% in May 2026). In addition, the company raised its minimum dividend payout ratio from 50% to 60% (based on standalone adjusted net income) and plans to pay an interim dividend in September.
The dividend per share (DPS) is projected to increase gradually to 3,200 won in 2026, 3,300 won in 2027, and 3,500 won in 2028.
Analyst Park gave a positive assessment, stating, “Shareholder returns are shifting from plans to reality.”
The stock price, which had been rising sharply until early June, reversed course and fell again, widening the discount to NAV to 54.7%. The 12-month forward price-to-book (P/B) ratio also remains at 0.5x, indicating the stock is still undervalued.