Bloomberg News

LG Electronics, Affiliates Gain on Speculation Declines Overdone

September 29, 2011

Sept. 29 (Bloomberg) -- LG Electronics Inc. and other LG Group units advanced in Seoul trading on speculation recent declines in their share price were overdone.

LG Electronics, the world’s third-largest mobile-phone maker, surged 13 percent to 69,800 won as of 2:49 p.m. on the Korea Exchange. LG Innotek Co., a light-emitting diode maker, and LG Display Co., the world’s second-largest liquid-crystal display maker, both advanced more than 10 percent.

LG Electronics dropped 25 percent this quarter through yesterday. LG Innotek and LG Display slipped 39 percent for the same period, while the benchmark Kospi Index sank 18 percent.

“It’s excessively undervalued,” Park Won Jae, an analyst with Daewoo Securities Co., said in a report today on LG Electronics. “Opportunities are also rising for LG as mobile- phone carriers introduce more-advanced services, in which the company has made a lot of investments.”

The recent decline in LG Display’s share-price has left its valuation attractive, even as panel prices are unlikely to recover soon, Kim Byung Ki, an analyst with Kiwoom Securities Co., said by phone today. The stock trades at 0.7 times estimated book value, compared with a 1.15 multiple in the Kospi Index, according to Bloomberg data.

--Editor: Brett Miller

To contact the reporter on this story: Saeromi Shin in Seoul at sshin15@bloomberg.net

To contact the editor responsible for this story: Darren Boey at dboey@bloomberg.net


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