[E-Daily Reporter Park Jung-Soo ] On the 8th, Daol Investment & Securities maintained its “Buy” rating on LGELECTRONICS(066570), noting that the visibility of new growth drivers—such as AI data center cooling and the robotics business—is increasing, and raised its target price by 50% from 160,000 won to 240,000 won. The previous day’s closing price was 189,100 won.
Kim Yeon-mi, an analyst at Daol Investment & Securities, stated, “More important than the second-quarter earnings surprise are the improvement in the core business’s fundamentals and structural changes such as AI data center cooling and the robotics business,” adding, “The basis for a re-rating has been further strengthened.”
LGELECTRONICS’ second-quarter consolidated revenue rose 14.9% year-over-year to 23.8297 trillion won, while operating profit surged 146.9% to 1.5788 trillion won. This exceeds the market consensus estimate of 1.074 trillion won in operating profit by 47%. However, most of this increase was attributed to the impact of U.S. tariff refunds; adjusted operating profit, excluding this effect, was estimated at approximately 950 billion won.
Analyst Kim explained, “Even excluding the effect of tariff refunds, the cost structure—including logistics and raw material costs—is improving, and the cost-efficiency strategy for the TV business is also contributing to profit growth,” adding, “We are seeing a virtuous cycle in which the company’s role as a stable cash cow supports its capacity to invest in new businesses.”
The AI data center cooling business is also expected to enter a phase of full-scale growth. Analyst Kim analyzed, “Considering the 7- to 9-month lead time from order placement to revenue recognition, orders from big tech hyperscalers secured in the second half of this year are highly likely to translate into revenue starting in the second half,” adding, “Opportunities for domestic companies to expand their market share are also opening up as the Asian data center market expands.”
He also highly rated the strategic value of the robotics business. Researcher Kim stated, “Global robotics companies currently have a need to secure datasets for on-site training, and LGELECTRONICS has the advantage of being able to secure robot training data through its own production bases and smart factories.” He added, “We set up a pilot line for actuators in June and plan to begin mass production in the second half of the year, and we also expect to expand our gearbox business into external sales.”