LG H&H: Thin Profits and Net Loss Persist as Shares Trade Below Book Value

Thesis

The data supports a picture of a company whose earnings have shrunk for several years but whose balance sheet looks light on debt. Revenue fell from ₩8.1T in 2021 to ₩6.4T in 2025, and operating margin dropped from 15.9% to 2.7%. Trailing free cash flow is positive at ₩440.4B, and cash of ₩1.33T far exceeds borrowings of ₩76.5B. The data does not show why results declined or whether they will recover. Investor flows, foreign ownership, short balance and news headlines are not available, so sentiment cannot be assessed from this data. Filings from August and September 2026 show a rights offering decision, an acquisition and a sale of shares in other companies, but the data gives no terms or amounts.

Business overview

LG H&H (code 051900) is listed on KOSPI in the cosmetics sector. It was founded on 2001-04-03 and listed on 2001-04-25, with 15,618,197 listed shares. The CEO is listed as 이선주. Market capitalization is about ₩4.1T and enterprise value about ₩2.85T. Revenue was ₩8.1T in 2021, ₩7.2B... correction: ₩7.2T in 2022, ₩6.8T in 2023, ₩6.8T in 2024 and ₩6.4T in 2025. Revenue growth was -11.2% in 2022, -5.3% in 2023, 0.1% in 2024 and -6.7% in 2025.

Financial analysis

All figures come from filed financial statements (DART). Trailing twelve-month revenue to H1 2026 was ₩6.29T, operating income ₩184.1B (2.9% margin) and net income -₩75.5B (-1.2% margin). Return on equity was -1.3%. Annual operating income fell from ₩1.29T in 2021 to ₩711.1B in 2022, ₩487.0B in 2023, ₩459.0B in 2024 and ₩170.7B in 2025. Net income was ₩844.5B in 2021 and positive through 2024 (₩189.1B), then -₩100.1B in 2025. Liabilities to equity are 25.0%. Cash is ₩1.33T against borrowings of ₩76.5B, and trailing free cash flow is ₩440.4B.

Valuation

With negative earnings, the price-to-earnings ratio is not available. Price-to-book is 0.7, matching the 0.7 at the end of 2025; earlier year-end multiples are not available. Price-to-sales is 0.7, EV/EBITDA is 7.6 and dividend yield is 1.1%. Among peers, Amorepacific shows a P/E of 27.0 and P/B of 1.4, and APR shows a P/E of 31.0 and P/B of 20.7. Cosmax, Kolmar Korea and d'Alba Global have no multiples in the data. LG H&H's P/B is below the two peers with data. The shares trade 21.8% below the 52-week high of ₩335,500 and 25.0% above the low of ₩210,000.

Catalysts

• A rights offering (paid-in capital increase) decision was filed on 2026-08-24 and amended on 2026-09-01, though the data gives no size or terms.
• Acquisition and sale of shares in other companies were filed on 2026-08-24 and amended on 2026-09-01, which may reshape the asset base.
• The half-year report for June 2026 was filed on 2026-08-14, showing trailing operating margin of 2.9%.
• Investor relations events were held on 2026-08-19 and 2026-08-24, close to the capital-raising filings.
• A 5%+ holding report was filed on 2026-10-02, indicating a change in a major shareholding, with no details in the data.

Risks

• Trailing net income is negative at -₩75.5B, and annual net income turned negative in 2025.
• Revenue has declined in four of the last five reported years, with 2025 revenue 21.5% below 2021.
• Operating margin of 2.9% leaves little cushion compared with 15.9% in 2021.
• A rights offering could dilute existing shareholders, and its terms are not in the data.
• Data on investor flows, foreign ownership and short interest is unavailable, limiting visibility into market positioning.

Closing view

The evidence is mixed. Earnings and margins have fallen sharply over five years and the company is currently loss-making at the net level, which weighs on the outlook. On the other side, the balance sheet carries little debt, cash is large, free cash flow is positive, and the shares trade at 0.7 times book. The rights offering and share transactions are the key items to follow, but the data does not give their details, so conclusions about their effect are not possible.

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 H&H: Thin Profits and Net Loss Persist as Shares Trade Below Book Value