Thought the "Jensen Huang Boost" Was Already Priced In... Target Price Nearly Doubled [Click eStock]

LG Group Shares Rally on Jensen Huang's Visit to Korea
LG Holding Company Target Price Raised from 115,000 Won to 200,000 Won

Jensen Huang, CEO of NVIDIA, is giving an interview to global media including those from Korea at the 'Korea Partner Night' dinner event held at a restaurant in Taipei, Taiwan, on the 1st (local time). Photo by Yonhap News Agency

On June 2, Kiwoom Securities raised its target price for LG from 115,000 won to 200,000 won, maintaining its “Buy” investment opinion, citing that the value of artificial intelligence (AI) and robotics is finally starting to be recognized.

In a report, Ahn Youngjun, an analyst at Kiwoom Securities, stated, “As the stock prices of major subsidiaries have risen, the net asset value (NAV) has reached an all-time high of 37.5 trillion won,” adding, “This was mainly driven by increases in the share prices of listed subsidiaries such as LG Electronics and LG CNS.”

Ahn explained, “Recently, the group’s stock prices have risen as the growth potential of new businesses such as AI and robotics has come into the spotlight,” and added, “As a holding company, LG is expected to benefit directly from the increased visibility of the group’s new business capabilities, in addition to the NAV increase resulting from higher subsidiary share prices.”

The main reason cited was, “The LG AI Research Institute, which is responsible for AI model development, is an organization under LG Management Development Institute in which LG holds a 100% stake,” and explained, “Given the pure holding company structure, it is highly likely that LG will make direct investments in new businesses.”

The AI model ‘Exaone,’ developed by LG AI Research Institute, proved its software capabilities by ranking first in the initial evaluation of the national AI foundation model project (National AI Representative) in January. A second evaluation is scheduled for August, and expectations are high that LG’s AI model development capabilities will be highlighted once again. The increase in the value of LG AI Research Institute is highly likely to directly lead to a rise in LG’s corporate value due to the shareholding structure.

Ahn further commented, “Expanding new business capabilities requires large-scale investment, and such investments are more efficient when led by the holding company rather than business subsidiaries.” He added, “As of the end of the first quarter, LG holds 1.3 trillion won in cash equivalents, which raises expectations for new investments in emerging businesses and further growth potential.”

This content was produced with the assistance of AI translation services.