[E-Daily Reporter Hyera Lee ] On the 9th, KB Securities noted that #LG CNS is seeing tangible progress in its AI commercialization efforts, centered on financial AI and physical AI, and predicted that profitability will continue to improve through its AI development tool (AIND). The firm maintained its “Buy” investment rating and target price of 105,000 won.

Kim Jun-seop, an analyst at KB Securities, stated in a report released that day, “The key investment thesis lies in the high-growth earnings story,” adding, “This is supported by high operating profit growth driven by the high growth of the AI Cloud business division, revenue expansion through overseas market entry, and improved profitability.”
KB Securities estimated LG CNS’s second-quarter revenue at 1.66 trillion won and operating profit at 142.9 billion won. These figures represent year-over-year increases of 13.8% and 2.1%, respectively, and are expected to largely meet market expectations.
Analyst Kim explained, “Although we have lowered our earnings forecast from previous estimates, this is not due to a slowdown in demand but rather the result of conservatively adjusting the timing of revenue recognition.” He added, “While issues related to ChatGPT and Claude have recently come to the fore, since these projects are still in the stages of reseller contracts, proof of concept (PoC), and platform launches, large-scale revenue is likely to be reflected starting in the second half of the year.”
The AI business is assessed to be showing tangible results, centered on financial AI and physical AI. Analyst Kim noted, “Based on our experience in building financial IT systems, opportunities to win AI integration projects from major financial institutions are increasing.” He also explained that in the physical AI sector, which is expanding into logistics and manufacturing sites, the company is broadening its business foundation by securing a 190 billion won physical AI infrastructure project from LGELECTRONICS.
He also expressed optimism regarding improved profitability. While the second-quarter operating profit margin is projected to be 8.6%—a 1.0 percentage point decrease year-over-year due to the base effect from last year’s provision reversal—it is expected to improve by 1.4 percentage points compared to the previous quarter.
Analyst Kim stated, “Cost ratios are improving thanks to development tools utilizing the AI development platform ‘AIND,’” adding, “We have transformed AIND, which was previously used internally, into a platform and are applying it to projects for major financial institutions. Cost ratio improvements will remain a key driver of profitability in the second half of the year as well.”