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LG Electronics' value-up program sparks share price rally

Published: 18 Dec. 2024, 10:06 Updated: 18 Dec. 2024, 16:43

JIN EUN-SOO
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LG Electronics CEO William Cho speaks during a talk session with its employees at its Yeouido headquarters in western Seoul on Dec. 17. [LG ELECTRONICS]

LG Electronics shares rallied on Wednesday as the company revealed details of its value-up program aimed at boosting share prices the previous day.

Its shares closed at 91,500 won ($64), up by 5.41 percent from the previous trading day.

On Tuesday, LG Electronics announced plans to retire 761,000 shares — equivalent to 0.5 percent of its total issued stock — by next year.

The planned retirement is expected to drive up earnings per share and book value per share, leading to enhanced shareholder value, the company said.

LG also pledged to allocate at least 25 percent of its consolidated net profit to shareholder returns, excluding one-time non-operating gains. Additionally, it introduced a minimum annual dividend of 1,000 won per share starting this year to enhance predictability for shareholders.

The company is also ramping up efforts to communicate transparently with its shareholders. It previously held 2030 Future Vision and Investor Forum events, where it shared its objective of reaching a return on equity of at least 10 percent by 2027.

It also declared an aim to reach 100 trillion won in consolidated revenue by 2030, excluding that of LG Innotek.

LG Electronics CEO William Cho on Tuesday held a forum with employees at the company's Yeouido headquarters in western Seoul.

"Risk is a combined term for danger and opportunity," he said.

"Even in times of crisis, [we should] focus on discovering opportunities for growth and navigate through it wisely."

Cho said the leadership at LG is drafting a "playbook" to counter diverse range of possible scenarios under multiple risk factors such as the rapid growth of Chinese companies armed with both price and technology competitiveness.

"The world economy is shifting from geopolitics to geoeconomics," he said. "There were common rules and order in the global market, but from now on there will be a new normal where rules and order don't exist, but just fierce competition for survival."

BY JIN EUN-SOO [[email protected]]