[Click eStock] "LG Household & Health Care, Strong Q4 Performance Expected... Operating Profit Up 8% YoY"

[Asia Economy Reporter Park Jihwan] Shinyoung Securities maintained a 'Buy' rating and a target price of 1.95 million KRW for LG Household & Health Care on the 13th, expecting strong performance in the fourth quarter of last year.

Shin Suyeon, a researcher at Shinyoung Securities, forecasted that "LG Household & Health Care's fourth-quarter sales and operating profit will be 2.1516 trillion KRW and 259.2 billion KRW, respectively, representing a 6.9% and 7.6% increase year-on-year." Due to the impact of the major Chinese shopping event, Guanggunje, in the fourth quarter, overseas cosmetics sales are expected to perform well, and especially this year's Guanggunje is anticipated to achieve the highest sales record ever due to a longer pre-order period compared to previous years.

However, the duty-free channel is expected to see a decline in demand after the end of the Guanggunje event in early November, leading to a wider sales decrease compared to the third quarter. Sales of household goods are estimated at 524.8 billion KRW, a 53.4% increase compared to the same period last year. Researcher Shin explained, "This is due to the combined effect of inorganic growth from brands like Physiogel and New Avon, and organic growth driven by the premiumization of domestic and overseas household goods."

He added, "Beverage sales are expected to record 338.1 billion KRW, a 1.1% increase year-on-year," and predicted, "Despite seasonal factors, strong sales of carbonated drinks are expected to continue throughout the year."