[Weekly HOT Stocks] Donghak Ants Show Great Interest in 'LG Electronics' in the First Week of the New Year

This Year, Innotek Projects Operating Profit Exceeding 3 Trillion Won Even Without Performance

[Asia Economy Reporter Kum Boryeong] In the first week of 2021, individual investors showed great interest in LG Electronics.

According to the Korea Exchange on the 9th, from the 4th to the 8th, individual investors net purchased LG Electronics shares worth 522.5 billion KRW. LG Electronics ranked second among the top stocks net purchased by individual investors during this period.

The stock price rose. The closing price, which was 135,000 KRW on December 30 last year, closed at 147,500 KRW on the previous day, rising 9.26% over five trading days.

LG Electronics announced its Q4 earnings yesterday, reporting sales of 18.7826 trillion KRW and operating profit of 647 billion KRW. Compared to the previous year, sales increased by 16.9% and operating profit surged by 535.6%.

Go Jung-woo, a researcher at NH Investment & Securities, said, "Although figures by business division were not disclosed, it is estimated that the home appliances, TV, and automotive components businesses drove the earnings growth." He added, "The home appliances business is expected to grow due to increased sales of new appliances, the TV business is expected to improve profitability due to product mix improvement and increased online sales, and the automotive components business likely had a positive impact on overall company performance due to increased shipments of electric vehicle parts."

At the end of last year, LG Electronics attracted market attention by announcing plans to establish a joint venture in the powertrain sector with Magna International, the world's third-largest automotive parts company. Strategic partnerships with global automotive parts companies are expected to generate abundant growth opportunities.

This year, operating profit exceeding 3 trillion KRW is expected even without Innotek's performance. Kwon Sung-ryul, a researcher at DB Financial Investment, said, "Pure LG Electronics operating profit is expected to exceed 3 trillion KRW this year. Even assuming no special factors from last year in H&A (home appliances) and HE (TV), good profitability can be maintained through product mix improvement, and losses in VS (automotive components) and MC (smartphones) are expected to decrease." He explained, "H&A's key point is the surge in new appliances, HE's is the expansion of OLED TV sales, VS is expected to turn profitable in the second half of this year as low-priced orders are largely resolved and sales increase significantly, and MC's losses will decrease due to production efficiency improvements such as new form factor launches and increased ODM ratio."