Will LG Reclaim 4th Place in Market Cap? Physical AI Push Narrows Gap With Hanwha

[Financial News] LG Group is closing in on Hanwha Group as it aims to reclaim fourth place in market capitalization. Shares of LG Group, long seen as a perennially undervalued play, are rebounding as the conglomerate is being re-rated as a physical artificial intelligence (AI) company.
According to the Korea Exchange on the 23rd, the combined market capitalization of 12 listed LG Group affiliates stood at 171.4301 trillion won based on closing prices on the 20th. The gap with fourth-ranked Hanwha Group, at 171.5843 trillion won, has narrowed to just 154.2 billion won.
Defense stocks have drawn attention amid the conflict involving the United States and Israel on one side and Iran on the other, helping Hanwha Group climb to fourth place in market capitalization for the first time ever on the 6th. At that time, Hanwha Group’s market cap was 180.6740 trillion won, ranking behind Samsung Group (1,433.2720 trillion won), SK Group (826.5930 trillion won), and Hyundai Motor Group (300.6250 trillion won).
LG Group’s market cap then was 175.0290 trillion won, leaving a gap of more than 5 trillion won with Hanwha Group, but that difference has quickly narrowed. Analysts say the undervaluation appeal of LG Group affiliates has come into focus amid expectations that they will benefit from AI.
Over the past week, LG Corporation’s share price has risen 6.11%, and most affiliates have also gained ground. LG Innotek surged 18.40%, while LG Display climbed 5.90%, LG Electronics 4.24%, LG Chem 4.20%, and LG Energy Solution 1.76%.
The market is paying close attention to the fact that LG Group is expanding its footprint in physical AI. LG Electronics (robots, actuators), LG Innotek (sensors, camera modules), LG Display (OLED for robots), LG Energy Solution (high-performance batteries for humanoids), and LG Chem (battery materials) are all positioned across the component and materials supply chain for the broader physical AI industry.
There is also growing anticipation around LG Group’s "ONE LG" strategy. Centered on EXAONE, the AI model developed by LG AI Research, the group is expected to generate greater business synergies by pooling the capabilities of affiliates such as LG Electronics, LG Innotek, and LG Energy Solution under the "ONE LG" banner.
Brokerages have recently been raising their targets for LG affiliates as well. DS Investment & Securities, for example, expects LG Innotek to expand its role as a supplier of robot solutions and has lifted its target price from 370,000 won to 390,000 won.
Cho Dae-hyeong, an analyst at DS Investment & Securities, said, "The results of efforts to broaden applications to humanoid robots are steadily becoming more concrete," adding, "We believe the company is on the verge of supplying robot camera modules to a North American client, following Boston Dynamics." He went on to say, "Both earnings and momentum appear to have clearly bottomed out last year," and added, "Given that the company has entered a profit growth phase, the stock remains significantly undervalued."

jisseo@fnnews.com Seo Min-ji Reporter