Arab Today, arab today lg price target cut on share sale plan
Last Updated : GMT 08:51:39
Arab Today, arab today
Arab Today, arab today

LG price target cut on share sale plan

Arab Today, arab today

Arab Today, arab today LG price target cut on share sale plan

Seoul - Yonhap

South Korean brokerages lowered their price targets on LG Electronics Inc. on Friday, a day after the world\'s third-largest handset maker announced a plan for a 1.06 trillion won (US$953 million) share sale. LG Electronics confirmed reports Thursday that it plans to issue new shares to raise capital for investments in its struggling mobile division and other core businesses. Under the plan, LG Electronics will sell 19 million new stocks at 55,900 won per share. They will be listed on the bourse on Jan. 9. The announcement came after shares of LG Electronics and its affiliates took a blow from earlier reports on the rights offering. LG Electronics plunged 13.73 percent, while LG Display Co. slumped 6.32 percent and LG Corp. dropped 9.89 percent. A spate of securities firms cut their price targets for the tech heavyweight, citing soured investor sentiment and concerns about a share dilution. \"There are doubts on the purpose of the share plan since LG Electronics already has no problem in short-term liquidity,\" Samsung Securities Co. analyst Kim Jong-wan said in a report. \"Whether the plan was aimed for new investments, capital procurement or a possible corporate overhaul, they all lead to increased uncertainty for shareholders,\" Kim said, slashing the 12-month price target to 67,000 won from 90,000 won. Hanhwa Securities Co. cut its six-month price target to 91,000 won from 100,000 won, and HI Investment & Securities Co. lowered the corresponding figure to 70,000 won from 74,000 won. Analysts, however, said a further downfall in LG Electronics\' share price is unlikely as the negative impacts have mostly been factored in Thursday\'s near-14 percent plunge. \"Unless the company goes aboard to take part in mergers and acquisitions such as that of Hynix Semiconductor Inc., the negative influence is expected to be limited,\" said Kim Ji-san, an analyst at Kiwoom Securities Co. Some, meanwhile, retained their price targets on hopes the tech heavyweight will pull off a turnaround in its sluggish mobile phone business and see improved earnings next year. \"There are disappointment and concern over the sale plan. The company\'s share price may likely undergo an adjustment in the short-term,\" Park Seong-min, a tech analyst at Kyobo Securities Co., said by phone. \"But its adoption of new smartphone models and a pick-up in television business points to room for profit improvement. After all, earnings are the biggest deciding factors for large-cap share prices,\" Park said, maintaining the six-month price target at 94,000 won. Shares of LG Electronics closed down 0.81 percent at 61,100 won. In contrast, other LG Group shares returned to positive territory, with LG Display jumping 8.14 percent to 23,250 won and LG gaining 4.14 percent to 57,900 won.

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Arab Today, arab today lg price target cut on share sale plan Arab Today, arab today lg price target cut on share sale plan

 



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