[Click eStock] "LG Saenghwal Geongang, Profit Stagnation Inevitable Next Year... Investment Opinion & Target Price Down"

Hana Securities forecasted on the 30th that LG Household & Health Care's profits will inevitably stagnate next year. The investment rating was downgraded from 'Buy' to 'Neutral', and the target stock price was lowered from 500,000 KRW to 390,000 KRW.

LG Household & Health Care reported third-quarter results with sales of 1.7 trillion KRW, a 2% decrease compared to the same period last year, and operating profit of 100 billion KRW, down 17% year-on-year. The operating profit fell short of the market expectation of 140 billion KRW.

Park Eun-jung, a researcher at Hana Securities, explained, "Cosmetics sales declined in high-margin channels such as duty-free and home shopping, and household goods saw increased fixed cost burdens due to expanded marketing. Beverages underperformed company-wide due to sluggish domestic demand and increased promotions."

Researcher Park predicted that profit stagnation is inevitable next year as well. She said, "LG Household & Health Care is undergoing restructuring and investment across its cosmetics business. The direction of change is correct," but added, "During the restructuring process, the decline in sales from high-margin channels and expanded investments in channels and regions that have not yet reached normal profit capacity will likely cause the profitability of the cosmetics division to trend downward until the first half of next year." She further projected, "In 2025, consolidated sales will reach 6.9 trillion KRW, and operating profit will be 470 billion KRW, indicating company-wide profit stagnation."