LG Innotek unveils plan to raise ROE and generate $5.6 billion annually

Home > Business > Industry

LG Innotek unveils plan to raise ROE and generate $5.6 billion annually

Published: 22 Nov. 2024, 18:19

LEE JAE-LIM
[email protected]

LG Innotek's plant situated in Vietnam [LG INNOTEK]

LG Innotek, an electronic component manufacturer, unveiled a value enhancement program on Friday with goals to raise its return on equity (ROE) to over 15 percent by 2030 and to annually generate 8 trillion won ($5.6 billion) from its future growth businesses, such as producing autonomous driving components.

The value-up plan focuses on strengthening profitability, fostering mid-to-long-term growth in new business ventures and enhancing shareholder returns, according to the company’s regulatory filing.

LG Innotek aims to boost its ROE to 15 percent, up from 12 percent in 2023, by restructuring production processes and utilizing AI and digital transformation to improve cost competitiveness. To achieve its revenue target of 8 trillion won, the company is prioritizing core technologies for autonomous driving, including vehicle communication, lighting and sensing components, while also focusing on high-value semiconductor substrates, such as flip-chip ball grid arrays, to strengthen its position in the market.

LG Innotek also plans to enhance shareholder returns by increasing its dividend payout ratio from the current 10 percent of consolidated net profit to as much as 20 percent by 2030.

"Through profitability enhancement and growth in new businesses, we aim to elevate corporate value,” said LG Innotek CEO Moon Hyuk-soo in a statement, adding that the company will continue to communicate with shareholders and investors.

BY LEE JAE-LIM [[email protected]]