Operating Margin - LG Corp (KRX:003550)

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Price: 84 600 KRW 1.32%

Market Cap: 13.3T KRW

15.4%

Current

22%

Average

7.9%

Industry

Operating Margin represents how efficiently a company is able to generate profit through its core operations.

Higher ratios are generally better, illustrating the company is efficient in its operations and is good at turning sales into profits.

Operating Margin

15.4%

Operating Profit

1.1T

Revenue

7.5T

Operating Margin Across Competitors

Country		Company	Market Cap	Operating Margin
KR		LG Corp KRX:003550	12.8T KRW	15%
US		General Electric Co NYSE:GE	314.7B USD	18%
DE		Siemens AG XETRA:SIE	185.8B EUR	12%
JP		Hitachi Ltd TSE:6501	22T JPY	11%
US		Honeywell International Inc NASDAQ:HON	125.5B USD	20%
US		3M Co NYSE:MMM	86.8B USD	21%
ZA	B	Bidvest Group Ltd JSE:BVT	77.4B Zac	9%
US	R	Roper Technologies Inc F:ROP	40.6B EUR	28%
CN		CITIC Ltd HKEX:267	356.1B HKD	0%
MY	W	Warisan TC Holdings Bhd KLSE:WARISAN	111.4B MYR	-3%
KR		Samsung C&T Corp KRX:028260	39.8T KRW	8%

LG Corp
Glance View

Market Cap

12.8T KRW

Industry

Industrial Conglomerates

In the bustling landscape of South Korea's economy, LG Corp. has carved out a distinguished niche as a multifaceted conglomerate. From its humble beginnings in 1947, when it was founded as Lucky Chemical Industrial Co., the company has grown to become a noteworthy name globally, now offering a wide array of products and services that touch upon various aspects of daily life. At its core, LG operates through a robust network of affiliates spanning diverse sectors, with electronics, chemicals, and telecommunications as its flagship domains. In particular, LG Electronics has propelled the company into international fame, producing consumer electronics and home appliances that dominate households worldwide. This division's success is underscored by relentless innovation in technology, ensuring that every smartphone, TV, and air conditioner it rolls out captures the cutting edge of consumer expectations. Beyond electronics, LG Corp. monetizes its diverse offerings in areas like chemicals, where it manufactures essential components used in everything from cosmetics to renewable energy solutions, and telecommunications, where it provides critical infrastructure and services in South Korea. This diversification not only fuels steady revenue generation but also creates a synergy that fortifies its market position even amid economic fluctuations. Moreover, by investing in emerging sectors such as renewable energy and biotechnology, LG demonstrates a keen eye for future growth potentials, effectively weaving sustainability into its core business strategies. As LG marches forward, its integrated approach across various sectors not only amplifies profitability but also ensures that its footprint in global markets remains both influential and resilient.

View LG Corp Analysis

Intrinsic Value

What is Intrinsic Value?

Economic Moat is a concept popularized by Warren Buffett to describe a company's durable competitive advantage. It represents the 'moat' that protects a company from competitors and helps it sustain profitability over the long term. Our analysis of the past 10 years showed that companies with a wide economic moat significantly outperformed the market, delivering +645% returns compared to +189% for the S&P 500.

Our research into Economic Moat performance spans the past 10 years and focuses on companies with a wide economic moat. For this analysis, we calculated the average stock price returns of these companies, comparing them to the performance of the S&P 500 index over the same period.

The results were compelling: wide moat stocks achieved a remarkable +645% average return, compared to +188% for the broader market. This difference highlights the long-term benefits of investing in businesses that can maintain their market position and pricing power over time.

Note: This research does not account for survivorship bias. Past performance is not indicative of future results.

Determining whether a company has an economic moat requires both a deep dive into financial metrics and a qualitative assessment of its competitive position. Our analysts conduct a rigorous evaluation that focuses on identifying structural advantages that enable a company to sustain profitability and defend its market share over the long term.

The process begins with an analysis of a company’s historical financial performance. We assess how consistently the company has generated returns above its cost of capital and whether those returns have been stable or improving. However, financial performance alone doesn’t reveal the full picture. To understand the sources of these advantages, we evaluate five key drivers of economic moats:

Network Effect: We analyze whether the value of a company’s product or service grows as its user base expands. Platforms like payment systems or marketplaces benefit from this self-reinforcing.

Switching Costs: We assess whether customers face significant costs or disruptions when switching to a competitor’s product or service. High switching costs create customer stickiness and provide pricing power.

Intangible Assets: Strong brands, patents, and regulatory licenses can protect a company’s market position by creating barriers for competitors or enabling premium pricing. For example, a well-recognized consumer brand may command higher customer loyalty and margins.

Efficient scale: Occurs when a market is optimally served by one or a few players, making it unprofitable for new entrants to compete. This typically happens in industries with high fixed costs or geographic constraints, such as utilities or pipelines.

Cost Advantage: Companies with structural cost advantages can produce goods or services at a lower cost than their competitors, enabling them to offer competitive pricing or maintain higher margins. These advantages often arise from economies of scale, superior supply chain management, or proprietary technology. Firms like Walmart leverage their massive scale to negotiate better terms with suppliers, allowing them to undercut competitors on price.

By examining these factors in combination with a company’s financial performance and market positioning, we classify each company into one of three categories:

This rigorous evaluation ensures that our moat ratings are both comprehensive and reliable, giving investors the tools they need to make well-informed, long-term decisions.

The AI Assistant may sometimes provide inaccurate information.

Make your own investment decisions or consult a licensed financial advisor.

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US	Bank of America Corp NYSE:BAC	Banking
US	Mastercard Inc NYSE:MA	Technology
US	UnitedHealth Group Inc NYSE:UNH	Health Care
US	Exxon Mobil Corp NYSE:XOM	Energy
US	Pfizer Inc NYSE:PFE	Pharmaceuticals
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US	Walmart Inc NYSE:WMT	Retail
US	Verizon Communications Inc NYSE:VZ	Telecommunication
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LG Corp
KRX:003550