"LG Electronics: AI DC Cooling and Robotics Expectations Drive Target Price Up" [Click e-Stock]

Meritz Securities Raises Target Price
from 220,000 Won to 250,000 Won

On October 7, Meritz Securities maintained its "Buy" investment rating on LG Electronics and raised its target price from 220,000 won to 250,000 won.

Seungsu Yang, an analyst at Meritz Securities, stated, "This year, LG Electronics' share price has been driven by expectations for two main growth axes: cooling solutions for artificial intelligence (AI) data centers (DC) and robotics." He added, "We believe that as the growth visibility of these two businesses increases, there will be greater upside for the stock due to a valuation re-rating."

Yang forecasted that results for the AI data center cooling solutions business will become visible quickly. "We expect to secure an order backlog of about 3 trillion won by the end of the year, which should rapidly translate into visible results," he explained, adding that from 2027 onward, both revenue conversion from existing order backlog and increases in new orders will occur simultaneously. He also noted that, beyond air-cooled chillers, additional orders are expected for liquid cooling coolant distribution units (CDU) as a result of expansion in certified product categories among clients.

Regarding robotics, he said the business will begin full-scale commercialization starting next year. To commercialize robotics, it is essential to secure domain data, and LG Electronics has announced collaborations with key physical AI software companies to accumulate manufacturing and home environment–specialized data. "Currently, about 200 CLOi robots have been deployed to the Yangjae Data Factory, where they are engaged in learning and verification focused on non-standard and repetitive tasks on production lines," he said. "In particular, we are accumulating empirical data in processes that are difficult to automate and in areas with high worker dependency, and plan to sequentially deploy these robots to U.S. production bases beginning next year based on this data," he explained.

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