[Edaily Reporter Kim Hyung-il ] NH INVESTMENT & SECURITIES forecast that, for LG H&H(051900), the restructuring of non-core businesses has largely been completed, and that the stabilization of profitability in China and the continued growth of its core North American brands will be the key factors determining earnings visibility going forward. The firm maintained its “Hold (Neutral)” investment rating and raised its target price from 300,000 won to 330,000 won.

On the 23rd, Jeong Ji-yoon, an analyst at NH INVESTMENT & SECURITIES, revised the valuation horizon for LG H&H to next year and applied a target price-to-earnings ratio (Target PER) of 17.5x. However, the analyst judged that it would be difficult to raise short-term earnings expectations.

LG H&H’s third-quarter consolidated revenue is estimated at 1.5683 trillion won, a 1% decrease year-over-year, while operating profit is projected to rise 108% to 96 billion won. Operating profit is expected to fall 13% short of the consensus estimate.

Cosmetics revenue is estimated at 653.5 billion won, a 1% decrease year-over-year, while operating profit is projected to return to profitability at 18.0 billion won. Duty-free revenue is forecast to rise 137% to 90.8 billion won, with profit margins expected to recover to the 10% range.

Sales in China are expected to decline by 7% to 136.4 billion won. The firm believes that a widening loss compared to the previous quarter is inevitable due to the impact of the seasonal off-peak period, new product promotions, and the restructuring of the online business.

Revenue in North America is estimated to increase by 2% to 156.8 billion won. Excluding the consolidated results of Avon Company, the core business is projected to post double-digit growth. As Dr. Groot has established itself as a key growth brand, its share of core revenue in North America is expected to rise from 30% in the second half of 2025 to 50% in the first quarter of 2026 and 60% in the second quarter.

However, marketing expenses—driven by the launch of approximately 600 Costco locations in the third quarter of last year, approximately 400 Sephora locations in the third quarter of this year, and new product launches—are expected to be concentrated in the second half of the year.

Sales of household goods are estimated to increase by 2% to 411.5 billion won, while operating profit is projected to decrease by 7% to 29.6 billion won. With a continued decline in related sales due to the closure of some supermarkets, a significant turnaround is expected to be limited.

Beverage sales are estimated to decrease by 2% to 503.2 billion won, while operating profit is projected to decline by 23% to 48.3 billion won. Despite price hikes, a decline in profit is deemed inevitable due to slowing domestic beverage consumption and rising raw material costs.

Research Analyst Jeong predicted, “As the divestiture of non-core businesses—including the sale of Avon Company and the planned sale of Haitai HTB—reaches a conclusion, the stabilization of profitability in China and the continued growth of core brands in North America will be the key factors determining earnings visibility.”