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| LG Electronics China President Shin Mum-beom, left, holds an LG G3 smartphone with Lee Min-ho, a Korean actor and an ambassador for LG mobile devices, during a launch event for the product for China at the Westin Hotel, Beijing, Aug. 8. / Korea Times file |
By Kim Yoo-chul
LG Group is pulling off an impressive rebound from a recent business slowdown as its major affiliates are producing tech-driven, market-leading goods.
Emerging from years of struggles, the group as a whole is apparently opening a new chapter in its corporate history.
The turnaround was possible as Chairman Koo Bon-moo has been consistent in urging workers to return to the basics of a tech-driven corporation.
Koo is the eldest grandson of LG founder Koo In-hoi and has been in his post since 1995. He is credited with boosting the group's sales more than fivefold and its market capitalization rate more than 11-fold during the years he has been at the helm of the group.
"We have no doubt that this year will be very impressive on the back of the stronger performance of LG affiliates," the company said in a statement.
It said the chairman' consistent commitment to technology had been paying off.
LG said it would accelerate its efforts to introduce more market-leading products in the second half of the year.
"LG has emerged as a new game-changer in a number of fields. LG Electronics' latest flagship, the G3 smartphone, will exceed the 10 million sales mark for the first time since we entered the smartphone industry," the statement said.
At the same time, LG Chem has expanded strategic partnerships with top carmakers, including General Motors and Audi, to supply them car batteries.
LG Display, the world's top supplier in displays and one of the group's critical cash-generators with LG Chem, has also boosted its profits. Its on-time response toward premium displays that support ultra-high--definition viewing quality under OLED screens has begun yielding sizable returns.
LG Display will operate a new OLED panel-manufacturing line at its display complex in Paju, on the outskirts of Seoul, in the latter half of the year.
The group's telecommunications affiliate, LG Uplus, has increased its investments in faster wireless networks that support long-term evolution (LTE)-advanced speeds.
"LG's technology affiliates will expand the number of countries for increased sale of tech-enriched products. We are also trying to help improve the local economy," said the statement.
Analysts are also positive about the group units' outlook.
CIMB Securities revised up its target on LG Innotek shares by 10 percent, citing the warm response to LG's G3 smartphones. Innotek is the parts affiliate of LG Group.
Its target on LG Uplus shares is now at 11,300 won, from 9,300 won.
SK Securities raised its target on LG Display stock to 40,000 won from 35,000 won.
IBK Securities advised its clients to buy more LG Electronics stock, raising its target price to 91,000 won from 87,000 won.
LG Group is communicating more with its affiliates on pending issues as the chairman believes corporate sustainability will come from closer cooperation.
"Amid the industry's convergence moves, LG units are teaming up for balanced and shared growth. We are ideally positioned to foster the next business territories, such as automotive solutions, as LG Electronics, LG Innotek and LG Display can use LG Chem-owned battery channels to export more car solutions," LG spokesman Terry Taekyung Lee said.
Another reason things are improving for LG is it is seemingly safe from a possible management feud within the family ownership _ a common problem for Korean conglomerates.
LG markets itself as "the first major Korean corporation to introduce a holding company structure with advanced corporate governance.''
In 2003, LG became LG Corp. _ an American-style holding body for LG's various businesses.
"Thanks to the system, LG affiliates can focus on their jobs. Coupled with market recovery, the system is helping the group strengthen its global competitiveness,'' said Lee.
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