[E-Daily Reporter Shin Ha-yeon ] LGELECTRONICS(066570)is showing a gain of over 7% during intraday trading. This is believed to be driven by investor sentiment following the company’s second-quarter earnings, which significantly exceeded market expectations, as well as forecasts that the expansion of its artificial intelligence (AI) and robotics businesses—based on home appliances—will gain momentum.
According to MP Doctor on the 8th, as of 9:20 a.m. that day, LGELECTRONICS was trading at 202,500 won, up 7.09% from the previous trading day.
On the same day, Jo Hyun-ji, an analyst at DB Securities, stated, “‘LGELECTRONICS’ business portfolio is demonstrating solid performance led by home appliances, while expectations coexist for expanded earnings momentum—driven by the expansion of its air-care-focused robotics portfolio and increased supply of chillers for AI data centers (AI DC)—along with expectations for a higher price-to-earnings multiple,’ and raised the target price by 69% from the previous 45,000 won to 245,000 won.
Daol Investment & Securities also raised its target price for LGELECTRONICS by 50% from 160,000 won to 240,000 won on the same day, noting that the visibility of new growth drivers—such as AI data center cooling and the robotics business—is increasing.
Kim Yeon-mi, an analyst at Daol Investment & Securities, emphasized, “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.”
Analyst Kim noted, “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. Analyst Kim explained, “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, “The company set up a pilot line for actuators in June and plans to begin mass production in the second half of the year, and the gearbox business is also expected to expand into external sales.”
Previously, LGELECTRONICS reported second-quarter consolidated revenue of 23.8297 trillion won, a 14.9% increase year-over-year, and operating profit of 1.5788 trillion won, a 146.9% increase. This exceeds the market consensus operating profit of 1.074 trillion won by 47%.
The trend of improved performance is expected to continue into the second half of the year. Analyst Cho noted, “Given that some of the typical cost expenditures for the second half appear to have been partially reflected in advance due to the strong operating performance in the second quarter, we expect the seasonal slowdown during the off-season in the second half to be somewhat mitigated.”
He added, “Furthermore, as the heating and cooling market itself is expected to expand in Europe—where air conditioner penetration rates are low—we can anticipate an increase in ES cargo volume even against a higher year-over-year base.”