LG: Holding Company Trades Below Book Value as Earnings Stay Well Under 2021 Peak

Thesis

The data supports a picture of a financially conservative holding company whose profits have fallen sharply from their 2021 peak and have stabilized at a lower level. Operating income was ₩2.46T in 2021 and ₩912B in 2025, and trailing operating income to H1 2026 is ₩944B. The share price is up 51.6% over one year and 8.9% over three months, yet it sits well below the 52-week high of ₩185,900 (about 41.8% under it) and above the low of ₩70,100. The P/B of 0.5 shows the market values the company at about half of book equity, while the P/E of 22.4 is high against peers because earnings are depressed. Return on equity is only 2.6%, which helps explain the gap with book value. Investor flow, foreign ownership and short-balance data are not available, so we cannot say who has been driving recent price moves.

Business overview

LG is classified as a holding company on the KOSPI. It was founded on 1947-01-05 and listed on 1970-02-13, with 157,251,165 listed shares. The co-CEOs are listed as 구광모 and 권봉석. Revenue has stayed in a range of ₩6.9T to ₩7.5T over five years: ₩6.86T in 2021, ₩7.19T in 2022, ₩7.45T in 2023, ₩7.18T in 2024 and ₩7.25T in 2025. Trailing revenue to H1 2026 is ₩7.46T. The data does not break down revenue by segment or subsidiary. A recent filing on 2026-10-08 is an amendment about a production suspension at a subsidiary, but the data gives no detail on its size or cause.

Financial analysis

These figures come from filed financial statements (DART). Trailing twelve months to H1 2026: revenue ₩7.46T, operating income ₩944B, net income ₩758B, an operating margin of 12.7% and a net margin of 10.2%. Annual operating margin has fallen from 35.9% in 2021 to 27.0% in 2022, 21.3% in 2023, 13.5% in 2024 and 12.6% in 2025. Net income went from ₩2.57T in 2021 to ₩574.7M-scale low of ₩575B in 2024, then recovered to ₩737B in 2025. Revenue growth was 1.1% in 2025 after -3.6% in 2024. ROE declined from 12.1% in 2021 to 2.6% in 2025 and the trailing period. The balance sheet is lightly leveraged: liabilities to equity are 9.8%, cash is ₩872B against borrowings of ₩160B. Trailing free cash flow is ₩918B.

Valuation

At the current price the P/E is 22.4, P/B is 0.5, P/S is 2.3, EV/EBITDA is 13.8 and the dividend yield is 2.1%. Enterprise value is about ₩16.3T. At the end of 2025 the P/E was 17.2 and the P/B was 0.4, so both multiples have risen since then; earlier year-end multiples are not available. Listed peers are mostly financial or investment holding groups: SK Square (P/E 4.0, P/B 2.4), KB Financial (9.9, 1.0), Shinhan Financial (9.1, 0.8), SK (4.9, 1.1) and Hana Financial (8.6, 0.8). LG's P/E is higher than all of them, and its P/B is lower than all of them. The peers differ in business model, so the comparison is only rough.

Catalysts

• The 2026-10-08 amended filing on a subsidiary's production suspension may affect sentiment and, depending on details not in the data, future earnings.
• The 2026-08-27 cash dividend decision and shareholder-register closing relate to the 2.1% dividend yield.
• Half-year results filed on 2026-08-14 showed trailing operating income of ₩944B, slightly above the 2025 level of ₩912B.
• The 2026-09-14 filing on a change in the largest shareholder's holdings could matter for ownership structure, though the details are not in the data.
• Investor relations events on 2026-08-11 and 2026-09-09 show ongoing communication with investors.

Risks

• Operating margin has fallen for four straight years, from 35.9% to 12.6%, and the data does not show a clear recovery.
• ROE of 2.6% is low, which may keep the stock trading at a deep discount to book value.
• The P/E of 22.4 is above that of every listed peer shown, so the price leans on earnings improving.
• The subsidiary production suspension could weigh on results, and its impact is not quantified in the data.
• Flow, foreign ownership and short-selling data are unavailable, and there are no recent news headlines, which limits visibility on market positioning.

Closing view

The evidence points to a financially sound holding company with low debt, net cash and solid free cash flow, but with profits far below their 2021 level and a low return on equity. The strong one-year share price gain and a P/B of 0.5 sit alongside a P/E above peers, so the data shows mixed signals rather than a clear direction. The unresolved subsidiary production suspension and missing flow data leave important questions open. This report is informational and not a recommendation.

Model estimate of fair value

The valuation model has no estimate for this company yet (not enough data, or no positive value with the base case).

Report history

1. Oct 13, 2026InitiationLG: Holding Company Trades Below Book Value as Earnings Stay Well Under 2021 Peak