The LG Electronic Company

Paper Summary:

This paper explains that LG started in 1947 as Korea?s first chemical company and then became the first home appliance company in 1958. Today, it is a conglomerate of 49 subsidiaries, out of which 20 are listed on the Korea Stock Exchange. The author points out that the company is reorganizing its management structure of the LG group. after which it is expected that LG will become the holding company. The paper concludes that LG is a good stock for investment, but being a Korean company, presents a built-in liability.

From the Paper:

"Now let us look at the profitability of LG. the figures that we have for the company are for the first half of 2000, ending on august 7th, 2000. This is about three years old now. As per the audited accounts, LG Electronics had sales of 6.9 trillion won and sales profits of 572 billion won. (KRW (1,114.80): = US$1.00) One is at liberty to make the conversion directly. Roughly calculated, the sales are about $6 billion and the profits are about $500 million. The increase over one year was 34%, and exports were 69% of the sales and domestic sales were about 31%. The current profits were a little higher at 623 billion won. The profits had increased to five times to what they were in the previous year. The profitability was calculated to be roughly 9%. The reasons for profit were explained as "LGE's profit increase is mainly due to the significant increase in sales of high-value-added products."

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