Feb. 14 (Bloomberg) -- LG Electronics Inc. rose to an eight-month high in Seoul trading after Shinhan Investment Corp. raised its share-price estimate by 13 percent, expecting a recovery in advanced economies to help boost LG’s earnings.
The world’s third-largest maker of mobile phones, which this month reported the first profit at its handset business in seven quarters, climbed 3.1 percent to 91,000 won at the close of trading on the Korea Exchange, the highest level since June 7. The benchmark Kospi index dropped 0.2 percent.
Manufacturing in the U.S. grew in January at the fastest pace in seven months, while unemployment fell to 8.3 percent, the fifth consecutive decline. Europe’s manufacturing industry contracted less than initially estimated in January. North America and Western Europe account for a combined 55 percent of LG’s sales, according to Shinhan Investment.
“There have been some visible signs of recovery of advanced markets -- key to LG’s profitability,” John Soh, an analyst at Shinhan, wrote in a report today. “Competitiveness of the company’s key products is also improving.”
Soh raised his share-price estimate to 116,000 won.
LG’s mobile-phone business had an operating profit of 12 billion won ($10.7 million) in the quarter ended Dec. 31, the company said on Feb. 1. LG’s operating profit may rise to 1.1 trillion won in 2012, the highest in three years, Soh wrote.
--Editors: Suresh Seshadri, Garry Smith
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