By Kwanwoo Jun
LG Electronics’ shares rose early Tuesday on market expectations for a valuation boost from its expanding vehicle-component business.
Shares of the South Korean consumer electronics giant gained as much as 11% to 124,700 won ($94.12) in the morning session, outperforming the benchmark Kospi’s 0.8% rise.
The stock was on course for its largest daily percentage gain in more than two years.
Hana Securities analysts Roko Kim and Minkyung Kim said in a research note that they valued the vehicle-parts segment of LG Electronics at KRW9.9 trillion, nearly doubling their earlier estimate.
The analysts were upbeat on the company’s joint venture with Canadian auto-parts maker Magna International, which supplies electric-vehicle parts to all major U.S. automakers.
The vehicle-component segment of LG Electronics is forecast to post an annual average revenue growth of 20% over the next five years, they reckoned.
Hana kept a buy rating and KRW168,000 target price on the stock.
Write to Kwanwoo Jun at kwanwoo.jun@wsj.com
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