📉 [BultagiCom] LG CNS 25.6 Trillion Valuation: Can Q2 Earnings Prove It? - 2026.07.17

Hi, this is Peanut, digging into fundamentals and valuations at BultagiCom. You probably saw the closing price on July 16 at 65,000 KRW, down 3,300 KRW (-4.83%) from the previous day ^[7]. Trading volume dropped to around 710,000 shares, and both foreigners (-4.11 billion KRW) and institutions (-520 million KRW) turned to net sellers. Why are supply-demand and stock prices acting like this despite the bullish narratives? Is there a hidden bad news the market doesn't know, or is it just a simple breather? Let's analyze it coolly today.

💼 25.6 Trillion KRW Equity Value: Is It Verifiable?

A recent analysis of LG Group's corporate value estimated the listed equity value, including LG CNS, at a whopping 25.6 trillion KRW ^[2]. This is significantly higher than the unlisted asset value and is considered a key factor directly affecting the Net Asset Value (NAV) of the holding company LG ^[2]. The blueprint to build a K-AI sovereignty ecosystem by cooperating with LG Uplus and domestic AI semiconductor companies, or the strategy to strengthen profitability through Agentic AI, are certainly attractive materials ^{[5] [6]}.

However, from a fundamental analyst's perspective, I have a question. Is this massive valuation multiple actually verifiable with numbers? The answer lies in the upcoming announcement of preliminary Q2 consolidated operating results on July 31 ^[1]. Detailed IR materials will be released on the website that day, and we must closely examine whether the actual margin rates of the AX and cloud businesses in the second half can justify this valuation ^[1].

📉 Workforce Reduction and RX Momentum: Is There a Bearish Scenario?

There's another interesting piece of data. Despite growing performance, the number of newly hired employees decreased from 544 to 407 ^[3]. While it's framed as a selective hiring stance due to the AI transformation (AX) ^[3], we need to be cautious about whether this is margin defense through SG&A control or if they've hit a limit in top-line growth.

Of course, there are positive signals, such as using 'RX' as a breakthrough for stock price growth while reducing internal transactions and expanding governance ^[4]. However, from a short-to-medium-term swing perspective, we cannot rule out the possibility that the current price level is a Value Trap.

What if the Q2 results announced on the 31st show higher-than-expected initial investment costs for cloud migration or RX business, damaging the operating profit margin? There is a risk that institutional investors, seeing the gap between high market expectations and actual fundamentals, might target it for profit-taking. No matter how bullish the atmosphere is, you must keep this bearish scenario in mind.

Peanut believes this is a period where conservative risk management is needed rather than hasty expectations until the earnings announcement on July 31. Numbers don't lie. I'll be back in the next earnings review with specific fundamental indicators like EV/EBITDA.

📰 Reference News (7)

1

"Q2 earnings season is here"... Announcement schedules for SK Hynix, Hyundai Rotem, Samsung Electro-Mechanics, LG CNS, etc.

네이버뉴스 · 2026.07.16

📰 View original

2

[LG, Next Move] ⑥ Will AI and robots lead to corporate value?

네이버뉴스 · 2026.07.16

📰 View original

3

(Tomato Column) The first opportunity shrinking due to AI

네이버뉴스 · 2026.07.16

📰 View original

4

LG CNS reduces internal transactions and expands governance... Breakthrough for stock price is 'RX' [Corporate Governance Report] - Korea Financial Times

한국금융신문 · 2026.07.16

📰 View original

5

Chairman Shin Dong-bin executes 'AX Survival'... Lotte Innovate unveils 10 types of AI agents

네이버뉴스 · 2026.07.17

📰 View original

6

[K-AI National Representative ①] LG AI Research's 'K-EXAONE' overcomes Big Tech walls to establish AI sovereignty

네이버뉴스 · 2026.07.17

📰 View original

7

KOSPI 200 Closing Price List-4

네이버뉴스 · 2026.07.16

📰 View original