[Click eStock] "LG, Potential for Expanding Shareholder Returns Remains"

Hana Securities evaluated on the 13th that LG still has potential to expand shareholder returns. They maintained a 'Buy' investment rating and a target price of 120,000 KRW.

LG's operating profit for the first quarter of this year recorded 422.6 billion KRW on a consolidated basis, down 16.3% year-on-year, falling about 18.1% short of market expectations.

Choi Jung-wook, a researcher at Hana Securities, said, "Looking at the first quarter results, there was a decrease in equity-method income from subsidiaries and a temporary increase in expenses," adding, "However, consolidated earnings are expected to improve starting from the second quarter." He analyzed, "In the case of LG Chem, the negative lagging effects are gradually being resolved as the price declines in both petrochemicals and cathode materials have ended. The increase in LG CNS's operating expenses is only a temporary cost increase due to new project progress, and LG Household & Health Care is recovering thanks to normalization of sales in China and the development of sales channels outside China."

Researcher Choi also mentioned the shareholder return policy stance and commitment. He explained, "LG's dividend per share (DPS) has continuously increased over the past seven years, but this year, the increase in DPS may be somewhat difficult due to a decrease in dividend income, which is a major source of dividends." However, he added, "Through the dividend policy improvement implemented in 2022, income from trademarks and rental revenue, in addition to dividend income, can be used as dividend sources, and LG has expressed a strong commitment to active shareholder returns." He further stated, "Considering incentives for shareholder return policies introduced through the value-up program, at least the minimum DPS will be maintained."