LG Electronics' Target Price Raised to 270,000 Won on AI Cooling Solutions and Robotics Growth Outlook

[Financial News] On the 29th, Daishin Securities raised its target price for LG Electronics from 240,000 won to 270,000 won, a 12.5% increase, saying investors should focus on the growth potential of its AI data-center cooling solutions and robotics business. The brokerage maintained its "Buy" rating.
Park Kang-ho, an analyst at Daishin Securities, explained, "The investment case and market view on LG Electronics are undergoing a positive shift. Attention should be paid to the growing orders for chillers and air-conditioning equipment for AI and data centers, as well as improving profitability in the automotive components business, as the company moves beyond its traditional home-appliance operations."
Park highlighted the expansion of cooling-solution orders in the ES (HVAC) business as a key investment driver. LG Electronics secured 600 billion won in orders related to AI and data-center cooling solutions in the first half of this year, while additional orders worth approximately 2 trillion to 3 trillion won are estimated to be underway in the third and fourth quarters.
He forecast, "Considering supply and production lead times, revenue will expand from the second quarter of 2027 onward, led by high-value-added products, improving the operating profit margin of the HVAC business." He added, "The company is also increasingly likely to move away from the recurring fourth-quarter operating losses on a standalone basis, while easing the seasonal decline in earnings during the off-season in the second half."
Regarding the competitiveness of its cooling solutions, he highlighted LG Electronics' portfolio of chiller-based cooling equipment, related software, and power-grid integration solutions. He also viewed positively its water-cooling technology, which is advantageous for handling large heat loads, its cooling value chain, and its ability to collaborate with LG Group. The company's recent approval from NVIDIA for the AI factory specifications of its 2.5MW-class cooling distribution unit (CDU) was cited as an example of its business competitiveness.
Park forecast, "Cooperation with NVIDIA is taking concrete shape, while in-house production of actuators and external sales have begun. Based on LG Electronics' robotics-related data and software, as well as its ability to develop key components in-house, the company can expand its business from business-to-consumer (B2C) to business-to-business (B2B)."

[email protected] Choi Do-sun Reporter