LX Group expands in size, subsidiary performance mixed amid sluggish environment

2023. 2. 7. 10:18
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LX Holdings Corp., the holding entity of LX Group [Image source: LX Holdings]
The units under LX Group that separated from LG Group almost two years ago have grown in size but they lost momentum for growth in earnings last year due to the slowing economy.

The combined revenue of LX Group’s listed units reached 24.9 trillion won ($19.8 billion) in 2022, up from 15.5 trillion won in 2020. Operating profit also went up to 1.3 trillion won from 325 billion won.

Its key units, however, reported weak earnings last year due to the sluggish industry environment.

LX Holdings Corp., the holding entity of LX Group, on Monday reported that it swung to an operating loss of 32.1 billion won in the fourth quarter last year on sales of 4.97 billion won, down 91 percent from the same period a year ago.

The operating revenue of LX Holdings that was launched in May last year is the equity method income that adds the net profits of its affiliates based on the share ratio. LX Holdings’ earnings slowed in the fourth quarter as net profits of key affiliates except for LX International Corp. fell.

LX Hausys is estimated to have logged an operating loss in 2022 due to a slump in the property market and cost burden, according to analysts. Earnings could improve this year on improved front industry that involves vehicle materials and industrial films.

LX Semicon, a fabless chip company, has also seen a decline in operating profit last year due to weak demand for home appliances. There is room for stock price growth, however, as shares are undervalued compared with other global rivals.

“LX Semicon is working to diversify profit sources to overcome weak chip demand,” said an unnamed official from LX Group. “The company will not only enhance capacity in its key product display driver ICs (DDIs) but also in MCU sensors and power chips.”

LX International, in the meantime, fared well.

According to financial data tracker FnGuide, LX International is estimated to report 1.01 trillion won in operating profit in 2022 on sales of 19.2 trillion won, up 54 percent and 15 percent, respectively, from a year ago. Fourth-quarter figures, however, are estimated to have declined 24.4 percent and 9.8 percent each.

Improved on-year earnings is attributed to the rise in the prices of mineral resources after the Russia-Ukraine war. LX International owns 51 percent stake in LX Pantos, a trading unit and a cash cow for the group. The company has also been accelerating expansion in new businesses by acquiring Hankuk Glass Industries Inc. and Poseung Green Power Co.

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