[Edaily Reporter KIM YOON-JEONG ] SKSecurities stated that despite concerns over slowing demand for TV sets, all business divisions at LGELECTRONICS(066570)posted better-than-expected results compared to early-year forecasts, and projected that the company will continue to outperform market expectations in the third quarter. The firm maintained its “Buy” rating and target price of 180,000 won.

On the 31st, Park Hyung-woo, an analyst at SKSecurities, stated, “All business divisions are performing well compared to concerns at the beginning of the year,” and predicted, “Third-quarter operating profit is expected to reach 1.1 trillion won, exceeding the consensus estimate (925.2 billion won).”
LGELECTRONICS’ second-quarter operating profit reached 1.6 trillion won, a 147% increase year-over-year, significantly exceeding the market consensus (1.1 trillion won). While this was partly driven by the recognition of tariff refunds as revenue, the effect was largely offset by increased cost expenditures; even accounting for this, the results are assessed as exceeding market expectations. SKSecurities estimated the net impact of the tariff refund at approximately 300 billion won.
By business division, HS (Home Appliances) posted an operating profit of 685.9 billion won, TV, Audio, and PC (MS) recorded 219.4 billion won, Automotive Electronics (VS) reported 191.2 billion won, and Heating, Ventilation, and Air Conditioning (ES) recorded 235.8 billion won. The Home Appliances division maintained steady shipment volumes; the MS division returned to profitability compared to the same period last year; and the VS division saw a significant improvement in profitability. Analysts note that the ES division is also emerging as a new growth driver.
Researcher Park explained, “Shipments from many set manufacturers, including those in Greater China, have recently been on a downward trend. In contrast, the company’s performance is exceptionally strong,” adding, “This is presumed to be the result of an effective premium strategy, combined with preemptive purchases by consumers ahead of inflation-driven price hikes.”
The data center heating, ventilation, and air conditioning (HVAC) business was also cited as a medium- to long-term growth driver. Certification for cooling units (CDUs) intended for North American clients has been completed, and sales efforts targeting additional big tech clients are underway. During its earnings conference call, LGELECTRONICS announced that it aims to secure data center HVAC orders worth trillions of won within the year.
However, the firm noted that uncertainty regarding demand for finished products remains in the second half of the year. This is because the preemptive purchases made in the first half could lead to a demand gap in the second half.
SKSecurities assessed LGELECTRONICS as a leading defensive stock within the IT sector. The firm explained that even during periods when stock price volatility in the IT hardware sector increased, LGELECTRONICS’ stock price remained relatively stable.
Analyst Park predicted, “If the effective tax rate, non-operating expenses, and equity method losses normalize, net income will stand out, and the company’s value will be reevaluated.”