KOSPIHolding Companies003550

LG

₩111,400▲ 1.46%2026-10-02 close

Market Cap

₩16.8T

Turnover

₩11.3B

Volume

100,000 shares

Shares out.

150M

PER

25.1×

PBR

0.6×

EPS

₩4,820

Dividend Yield

2.56%

PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Dividend yield is based on ₩3,100 per share · Prices as of the 2026-10-02 close

Report overview

After Full Treasury Share Cancellation, Testing Earnings Durability

LG Corp. recycles holding-company cash from dividends, trademark royalties and rent back to shareholders via payouts and share cancellations; after a large loss in Q4 2025, two consecutive quarters of expanding profit in H1 2026 and the durability of subsidiary earnings and AI partnerships are the key things to watch.

1
In Q2 2026 consolidated revenue was KRW 2,139.6bn, operating profit KRW 533.0bn and net profit attributable to owners KRW 465.7bn, the largest profit among the five quarters provided.
2
Q4 2025 saw an operating loss of KRW 421.7bn and a net loss attributable to owners of KRW 362.9bn, materially disrupting the annual profit trend.
3
The annual operating margin fell for four straight years from 27.0% in 2022 to 21.3% in 2023, 13.5% in 2024 and 12.6% in 2025, while revenue stagnated in the low KRW 7tn range.
4
In May 2026 the company cancelled all 3,029,581 remaining treasury common shares, reducing issued common shares to 151,192,004.
5
On a balance sheet with a 12.0% debt-to-equity ratio and total equity of KRW 30,334.8bn, the raised minimum payout ratio and twice-a-year dividend framework remain in place.

Business structure

LG Corp. is the pure holding company of the LG group and sits at the top of a structure that includes LG Electronics, LG Chem, LG Uplus and LG H&H among its subsidiaries. Management has stated a principle of funding dividends out of recurring profit generated from dividend income, trademark royalties and rental income.

Parent-only revenue therefore rests on those three simple pillars, while consolidated revenue and profit also capture the results of consolidated operating subsidiaries.

The direction of income ultimately tracks subsidiary performance: in Q1 2026 dividend income slipped slightly amid stalled electric-vehicle demand, while trademark royalty income of KRW 88.2bn filled the gap (Press9, June 2026).

For Q2 2026, rental income declined after the sale of the Gwanghwamun building, while trademark royalties rose on strong sales at LG Electronics and LG Innotek (Financial News, August 2026).

Competition is less about product markets than about capital allocation and shareholder returns among large Korean holding companies. The company has said it will spend part of the free cash left after dividends and investment, out of both one-off and recurring profits, on share buybacks.

Cash and cash equivalents were reported at about KRW 1.3tn as of the end of Q1 2026 (Insight, May 2026). Across the group, roles are vertically divided with robot hardware at LG Electronics, models at LG AI Research, sensors at LG Innotek, batteries at LG Energy Solution and operating systems at LG CNS.

Earnings trend

Quarterly revenue · Operating profit

₩1.8T₩276.9B25Q2₩2T₩418.9B25Q3₩1.5T-₩421.7B25Q4₩1.8T₩413.8B26Q1₩2.1T₩533B26Q2

RevenueOperating profit

Annual revenue · Operating profit

₩7.2T₩1.9T2022₩7.4T₩1.6T2023₩7.2T₩966.8B2024₩7.3T₩912.2B2025

RevenueOperating profit

Quarterly results · Last 5 quarters
Quarter	Revenue	Operating profit	Op. margin
2025Q2	₩1.8T	₩276.9B	15.4%
2025Q3	₩2T	₩418.9B	21.0%
2025Q4	₩1.5T	-₩421.7B	−27.7%
2026Q1	₩1.8T	₩413.8B	23.0%
2026Q2	₩2.1T	₩533B	24.9%

Annual results
Year	Revenue	Operating profit	Net income (parent)	Op. margin	ROE	Debt-to-equity
2022	₩7.2T	₩1.9T	₩2T	27.0%	7.8%	13.0%
2023	₩7.4T	₩1.6T	₩1.3T	21.3%	4.8%	12.0%
2024	₩7.2T	₩966.8B	₩574.7B	13.5%	2.1%	12.5%
2025	₩7.3T	₩912.2B	₩737.2B	12.6%	2.6%	12.0%

Consolidated basis (financial statements including subsidiaries) · Final figures from DART filings · Net income attributable to owners of the parent · Data as of 2026-09-04

Earnings analysis

On an annual basis, revenue was essentially flat in the low KRW 7tn range: KRW 7,186.0bn in 2022, KRW 7,445.3bn in 2023, KRW 7,175.5bn in 2024 and KRW 7,252.5bn in 2025.

Operating profit, however, fell from KRW 1,941.4bn in 2022 to KRW 1,589.0bn in 2023, KRW 966.8bn in 2024 and KRW 912.2bn in 2025, with the operating margin stepping down from 27.0% to 21.3%, 13.5% and 12.6%.

Net profit attributable to owners went from KRW 1,979.6bn in 2022 to KRW 1,261.2bn in 2023 and KRW 574.7bn in 2024, then turned back up to KRW 737.2bn in 2025. The quarterly pattern is far more volatile.

After Q3 2025 revenue of KRW 1,996.2bn and operating profit of KRW 418.9bn, Q4 2025 posted revenue of KRW 1,522.5bn with an operating loss of KRW 421.7bn and a net loss attributable to owners of KRW 362.9bn, a single quarter that decisively pulled down the full-year 2025 result.

Profit then expanded for two straight quarters, with Q1 2026 revenue of KRW 1,800.6bn and operating profit of KRW 413.8bn, followed by Q2 2026 revenue of KRW 2,139.6bn, operating profit of KRW 533.0bn and net profit attributable to owners of KRW 465.7bn, lifting the quarterly operating margin into the mid-20% area.

Q2 2026 was up on both revenue and profit versus Q2 2025 (revenue KRW 1,797.7bn, operating profit KRW 276.9bn, net profit attributable to owners KRW 204.6bn).

On a parent-only basis, Q2 2026 operating revenue of KRW 123.0bn (up 3.6% year on year) and operating profit of KRW 45.0bn (up 10.9%) were reported as a recovery from the weak prior quarter (Financial News, August 2026).

The balance sheet remains conservative even by holding-company standards, with end-2025 total equity of KRW 30,334.8bn (owners' portion KRW 28,708.5bn), total liabilities of KRW 3,648.1bn and a 12.0% debt-to-equity ratio, while operating cash flow declined from KRW 1,361.5bn in 2024 to KRW 1,015.1bn in 2025.

Industry analysis

Holding-company share prices are driven less by their own operations than by the value of held stakes and capital-allocation policy, and in Korea the net-asset-value discount tied to multiple listings is a long-standing issue.

Market commentary repeatedly points to LG Corp.'s discount to net asset value and the double-counting factor. The policy backdrop has moved in a direction favourable to larger returns.

From 2026, dividend income from listed companies with high or rising payouts is taxed separately at 14-30% instead of being aggregated, for three years, strengthening the tax incentive for high-dividend stocks.

At the same time, a third round of commercial-code amendments under discussion would in principle require treasury shares to be cancelled within one year of acquisition, putting the use of treasury stock itself under regulatory review. In end markets, subsidiary cycles diverge.

Brokerage commentary flagged LG Electronics' robotics cooperation with Nvidia and expansion into AI data centres and mobility as points of interest, while noting that a structural profitability recovery at LG Chem remains unclear (Hana Securities, May 2026).

Market perception of the physical-AI theme feeds straight into subsidiary valuations: Citi raised its LG Electronics target price from KRW 170,000 to KRW 400,000 in a 9 June 2026 report, and Bank of America lifted its target to KRW 350,000 in late May 2026, according to reports.

Conversely, weak 2025 results at key affiliates including LG Electronics, LG Chem and LG Energy Solution translated into lower holding-company profit, confirming that the parent's earnings swing with the cycle.

Outlook

The nearest confirmed event is a group technology showcase. LG said it will hold 'LG SPARK 2026' at LG Science Park in Magok, Seoul from 7 to 17 September 2026, foregrounding the intersection of AI technology with next-generation growth businesses such as physical AI, AI data centres and vehicle components.

The tech fair will display 41 future technologies, including 13 in the three 'One LG' core areas, and the AI Talk Concert on 14-15 September is set to disclose EXAONE's industry pilot results and development roadmap. Group AI cooperation has moved to a working level.

LG AI Research plans to use Nvidia's Blackwell GPUs and development platform to strengthen EXAONE, while Nvidia will support AI transformation across LG group businesses.

Chairman Koo Kwang-mo and Nvidia CEO Jensen Huang signed a memorandum on cooperation in three strategic areas - physical AI, AI infrastructure and mobility - at Nvidia headquarters, and LG Electronics referred for the first time in its half-year report to a joint project on robots for manufacturing sites (Herald Business, August 2026).

On shareholder returns, management said on the first-quarter conference call that it would strengthen group direction and governance transparency so subsidiary value is reflected in holding-company value, and continue sustainable dividend growth alongside buybacks and cancellations.

Roughly KRW 400bn after tax from the Gwanghwamun building sale is earmarked for investment centred on AI, bio and clean tech, with part considered for shareholder returns.

How fast dividend income recovers still depends on subsidiary conditions in areas such as electric vehicles and chemicals, so the improvement in parent-only recurring income remains the swing factor for future return capacity.

Valuation

PER

25.1×

PBR

0.6×

ROE

2.6%

EPS

₩4,820

BPS

₩197,388

Dividend per share

₩3,100

Holding companies typically trade at a discount to the sum of their stake values, and LG Corp. likewise trades at a price-to-book level below its book value per share (see the live figures on the screen card for exact numbers).

Profit-based multiples need care: the large operating loss of Q4 2025 still sits inside the trailing four-quarter profit sum, so the multiple screens higher than it would if only the two quarters of H1 2026 were reflected.

On dividends, the per-share payout has been held at the same level for the past three years, and after raising the minimum payout floor on adjusted parent-only net profit from 50% to 60%, the 2025 payout ratio was 68% with a 2021-2025 average of about 69%.

For 2025, KRW 250bn of share cancellations plus KRW 478.2bn of cash dividends brought total returns to KRW 728.2bn, a total shareholder return ratio of 73% (thebell, February 2026).

The full cancellation of treasury shares shrinks the denominator of per-share metrics, while the numerator continues to swing with the subsidiary profit cycle. Reports noted market attention on how the full cancellation affects the holding-company discount debate (Goodmorning Economy, May 2026).

PER, EPS, PBR and BPS are all calculated in-house (the same method as Naver and Toss) · Dividend yield = cash dividend per share from DART filings (supplemented by KRX) ÷ current price · As of 2026-09-04

Bull factors

Shareholder returns delivered as promised

After cancelling half of its treasury stock in 2025, the board resolved in May 2026 to cancel all 3,029,581 remaining common shares on 28 May, fulfilling its pledge of full cancellation within H1 2026. The cancelled block equalled 1.96% of issued common shares.

Dividend policy was also upgraded, with the minimum payout ratio raised from 50% to 60% and an interim dividend establishing a twice-yearly framework. The short gap between announcement and execution is seen as improving the predictability of capital allocation.

Profit expanding for two straight quarters

After the KRW 421.7bn operating loss in Q4 2025, operating profit expanded for two straight quarters to KRW 413.8bn in Q1 2026 and KRW 533.0bn in Q2 2026. Q2 2026 revenue of KRW 2,139.6bn and net profit attributable to owners of KRW 465.7bn were the highest among the five quarters provided.

The company attributed this to higher trademark royalties on strong subsidiary sales offsetting lower rental income. Among subsidiaries, LG Electronics reported record Q1 2026 revenue of KRW 23,727.2bn with operating profit up 32.9% year on year.

Group AI cooperation taking concrete form

LG and Nvidia said they would combine manufacturing data with AI computing and digital twins to build an autonomous manufacturing ecosystem linking sourcing, production, logistics and delivery, and set it as a new smart-factory standard.

The CLOiD home robot unveiled by LG Electronics at CES 2026 carries Nvidia's robot chipset and was simulated on the Isaac platform. EXAONE is broadening its footprint, including a three-way agreement with the London Stock Exchange and Kiwoom Securities built on a finance-specialised agent (Hana Securities, May 2026).

For the holding company, the key question is how such cooperation feeds through to subsidiary earnings and stake values.

Bear factors

Structurally lower earnings power

Annual operating profit more than halved from KRW 1,941.4bn in 2022 to KRW 912.2bn in 2025, and the operating margin fell from 27.0% to 12.6%. Revenue stayed in the low KRW 7tn range over the same period, so the profit decline was not offset by top-line growth.

The 5.7% year-on-year drop in 2025 operating profit was attributed to weak results at key affiliates including LG Electronics, LG Chem and LG Energy Solution. Operating cash flow also fell from KRW 1,361.5bn in 2024 to KRW 1,015.1bn in 2025, leaving a thinner cushion for shareholder returns.

Wide swings in quarterly results

In Q4 2025 revenue fell to KRW 1,522.5bn while the company posted an operating loss of KRW 421.7bn and a net loss attributable to owners of KRW 362.9bn.

Since both the preceding quarter (Q3 2025 operating profit of KRW 418.9bn) and the following quarter (Q1 2026, KRW 413.8bn) were profitable, large gains and losses evidently cluster in particular quarters.

Consolidated holding-company results can be affected by non-recurring items such as subsidiary revaluation or impairment, so the detail must be checked in disclosure notes. Such amplitude complicates both multiple calculations based on annual profit and judgements about dividend capacity.

Holding-company discount and multiple listings

Commentary consistently notes that LG Corp. trades at a wide discount to net asset value and that double-counting from multiple listings is a permanent consideration.

It has also been argued that although the group holds a long-term portfolio spanning batteries, vehicle components, appliances and chemicals, it is not perceived as a direct beneficiary of AI industry growth, and that key subsidiaries' share gains lagged the market (Hana Securities, May 2026).

Holding-company income depends on subsidiary dividend decisions, so any subsidiary dividend cut directly shrinks parent-only revenue. The concentration of discount-narrowing tools in dividends and buybacks is also cited as a constraint.

Risk factors

Regulation and policy

A third commercial-code amendment bill under discussion would in principle require treasury shares to be cancelled within one year of acquisition, including fines per director for violations. Opponents argue that mandatory cancellation would limit defences against hostile takeovers.

The final shape of the rules could change a holding company's capital-policy options. Because separate taxation of dividend income runs for three years, its continuation also needs monitoring.

Governance and litigation

In litigation over the division of the late chairman Koo Bon-moo's estate, the Seoul Western District Court dismissed the plaintiffs' claim on 12 February 2026, and the plaintiffs appealed on 4 March, with the appeal now before the Seoul High Court.

The appellate outcome remains a point of market interest regarding the ownership structure. The full treasury-share cancellation also arithmetically raised the largest shareholder's stake. Governance issues can amplify share-price volatility independently of earnings.

End-market demand and cycles

Dividend income flowing to the holding company from core subsidiaries such as LG Chem and LG Energy Solution has already declined amid stalled electric-vehicle demand. Commentary has also described a structural profitability recovery at LG Chem as still unclear (Hana Securities, May 2026).

Trademark royalties track subsidiary sales, so weaker appliance or vehicle-component demand would also erode that pillar. With rental income lower after the Gwanghwamun building sale, the buffer within the revenue mix is thinner than before.

What to watch next

7-17 September 2026
'LG SPARK 2026' at LG Science Park in Magok will showcase physical AI, AI data centre and vehicle-component technologies. The EXAONE industry pilot results and roadmap at the 14-15 September AI Talk Concert should help gauge how far group AI commercialisation has progressed.
During September 2026
Last year's first interim dividend used a 12 September record date with payment on 26 September. Checking whether this year's board resolution, record date and size are disclosed would test both the entrenchment of the twice-yearly framework and parent-only cash capacity.
Late October to early November 2026
Major subsidiaries including LG Electronics, LG Chem and LG Energy Solution are due to report third-quarter results. Subsidiary profit trends feed through to holding-company dividend and royalty income with a lag, making these a leading indicator for whether the profit expansion seen through Q2 2026 continues.
Late November 2026
On 28 November 2025 the company disclosed a 'corporate value enhancement plan progress report' detailing execution and its roadmap. If a comparable update appears, the items to check are how proceeds from the Gwanghwamun building sale are split between investment and returns, and whether further buyback plans are specified.
Early February 2027
Last year the company disclosed annual results on 5 February and decided the year-end dividend the same day. With the confirmed 2026 annual figures and the year-end dividend decision, investors can check adherence to the minimum payout floor and whether non-recurring losses like those in Q4 2025 recur.

Overall view

LG Corp. is a holding company that absorbs the subsidiary profit cycle directly on top of a simple income structure of dividends, trademark royalties and rent.

On confirmed figures, revenue stagnated in the low KRW 7tn range for four years and the operating margin fell from 27.0% in 2022 to 12.6% in 2025, while the KRW 421.7bn operating loss in Q4 2025 sharply disrupted the annual profit trend.

By contrast, Q1 2026 operating profit of KRW 413.8bn and Q2 2026 operating profit of KRW 533.0bn on revenue of KRW 2,139.6bn were the strongest stretch among the quarters provided, so the durability of that recovery is the next thing to verify.

On capital allocation, a record of executing what was announced has built up, including the cancellation of all remaining treasury shares and a raised payout floor with a 68% payout ratio for 2025.

At the same time, counterweights remain, such as the discount to net asset value, lower dividend income amid stalled electric-vehicle demand, and commercial-code amendment discussions that include mandatory treasury-share cancellation.

Because both the positive and negative factors stem from the same roots - subsidiary earnings and the policy environment - a practical approach is to check the September group technology event, third-quarter subsidiary results and the year-end update to the return plan in sequence. This report is for information purposes only and contains no buy or sell opinion or target price.

Sources

Korea Exchange (KRX) — Prices · Market Cap · Volume
FSS electronic disclosure system (DART) — Financial statements · Dividend filings

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Report written 2026-09-05 · Data as of 2026-09-04

This content is AI analysis of market data and web search results, provided for information only. It is not a solicitation or recommendation to invest. Investment decisions and their consequences are the investor's own responsibility. Data may be delayed or contain errors.