Peanut
June 28, 2026
🥜 LG Electronics: Beware of the Value Trap Behind the Glamour of AI Infrastructure 📉 - 2026.06.28
Hello, this is Peanut from Bultagi.com. Are you having a good weekend? With LG Electronics riding a roller coaster around the 195,900 won mark (based on the June 26 closing price, -3.50%), is this truly an opportunity or a value trap? Let's coldly dissect the fundamentals from a PE and EV/EBITDA perspective.
💼 B2B and AI Infrastructure: A Glamorous Blueprint, But Is It Real?
What has recently heated up the market is undoubtedly the AI and B2B momentum. Forecasts suggest that orders for AI data center chillers (cooling systems) targeting US Big Tech will get on track starting in the second half of the year [1]. Added to this is the news that they are pushing for humanoid robot development utilizing Nvidia's Jetson Thor and Isaac GR00T platforms [4]. Physical AI digital twin investments centered around the Changwon plant in the Yeongnam region are also taking shape [7].
The modular home 'Smart Cottage' is also taking direct aim at the B2B market by launching new 20-pyeong models [2]. The strategy is to bundle AI home appliances and HVAC (heating, ventilation, and air conditioning) while cutting the price per pyeong by up to 76% compared to previous models, starting at 199.5 million won [2].
But let's pause here with a question. Can this glamorous B2B order pipeline raise the company-wide operating margin enough to justify a premium of over 7x EV/EBITDA? Until verifiable numbers are stamped on the financial statements, we need to be wary of blind faith.
📉 Reefs in the Core Business: OLED Stagnation and Marketing Setbacks
Even in a bullish atmosphere, there is a bearish scenario we must address. That is the risk in the cash cow core businesses of TVs and home appliances.
According to market research firm Omdia, there is a risk that OLED TV shipments will stagnate at around 6.9 million units annually from 2026 to 2030 [3]. Conversely, Mini LED and RGB LED TVs are expected to grow rapidly, raising concerns that the revenue share of OLED, LG Electronics' flagship in the premium market, will decrease [3].
To make matters worse, due to the failure to advance to the Round of 32 in the North and Central America World Cup, the ambitiously prepared World Cup marketing, including AI TV promotions, came to a complete halt, taking a hit [5]. Of course, premium competitiveness was proven as their washing machines and refrigerators swept first place in the US Consumer Reports [6], but the pressure of rising costs for IT devices like PCs due to memory semiconductor shortages is a variable that cannot be ignored [8].
🛑 Peanut's Investment View: Value Trap Warning
Currently, LG Electronics is walking a tightrope between the massive narrative of an AI alliance and concerns over slowing profitability in its core business. In a volatile market, thorough risk management is required rather than just blindly holding on [9].
Peanut believes that from a short-to-mid term swing perspective, one must weigh the speed of materialization of B2B infrastructure orders against the potential margin erosion in the flagship business. Shouldn't we take a cautious and conservative approach, leaving open the possibility of falling into a value trap deceived by a superficial valuation, and considering it a candidate for profit-taking trim during sudden rallies?
I'll be back next week with cold, hard numbers. Enjoy the rest of your weekend!
📰 Reference News (8)
LG Electronics' AI Data Center Cooling Business on Track; Lee Jae-sung Paves Way for Big Tech Orders in H2
네이버뉴스 · 2026.06.28
📰 View original
LG Electronics Unveils First 20-Pyeong Smart Cottage... Per-Pyeong Price Slashed by Up to 76%
네이버뉴스 · 2026.06.28
📰 View original
"OLED TV Shipments to Stagnate at 6.9M Units by 2030... Revenue Share to Decline"
네이버뉴스 · 2026.06.28
📰 View originalKorean Robot Stock Picked by Jensen Huang... Name Yet to be Revealed - Global Economic
네이버뉴스 · 2026.06.28
📰 View original
"No More Daytime Chimaek"... Marketing Halted After Round of 32 Elimination
네이버뉴스 · 2026.06.28
📰 View original
LG Electronics Tops 3 Categories in U.S. Consumer Reports... Sweeps Washers and Built-in Refrigerators
네이버뉴스 · 2026.06.28
📰 View original
Semiconductor Fab in Honam, Packaging in Chungcheong... Physical AI and Data Centers in Yeongnam
네이버뉴스 · 2026.06.28
📰 View original
Apple's Price Hike Shows Signs of Spreading to All IT Devices
네이버뉴스 · 2026.06.28
📰 View original
Comments 0
to comment Login