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[EQUITIES] LG’s smartphone business shows no sign of turnaround: Kiwoom

[THE INVESTOR] Kiwoom Securities on Sept. 21 lowered LG Electronics’ target stock price from 85,000 won (US$76) to 75,000 won, saying its struggling smartphone business shows no sign of an immediate turnaround.

“We are cutting the company’s third-quarter operating profit projection from 390.2 billion won to 307.1 billion won,” the securities firm said.

“Sales of home appliances and TVs will maintain high profitability but its smartphone business will lose more money due to the sluggish flagship models, coupled with increased costs.”

 
LG Electronics mobile chief Cho Juno speaks at the V20 smartphone launch event on Sept. 7.
LG Electronics mobile chief Cho Juno speaks at the V20 smartphone launch event on Sept. 7.


Despite upbeat sales of premium appliances and TVs, Kiwoom said, marketing costs have soared on failed flagship smartphones over the past two years.

The firm predicted more spending as the mobile business division is carrying out a large-scale restructuring, including the relocation of 15 percent of the workforce.

By Lee Ji-yoon (jylee@heraldcorp.com)
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