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    A005930   KR7005930003

SAMSUNG ELECTRONICS CO., LTD.

(A005930)
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LG shakes up loss-making phone business, to outsource lower-end models

12/07/2020 | 04:32am EST
FILE PHOTO: A man walks past an LG logo at the Mobile World Congress in Barcelona

SEOUL (Reuters) - LG Electronics said on Monday it had reorganised its mobile phone division to increase outsourcing of its low to mid-end smartphones, which analysts said represented an attempt to cut costs and compete with Chinese rivals.

LG's mobile communications business, which has reported an operating loss for 22 consecutive quarters, has created a new management title for original design manufacture (ODM), a spokeswoman for the South Korean company said.

This refers to the outsourcing of design and manufacture of smartphones, with LG putting its label on the product.

It has also abolished some research and production positions and reshuffled others, the spokeswoman said, as part of an effort to focus its in-house R&D and production on premium smartphones, with low and mid-end ones to be produced by ODM.

Although ranked No. 3 in global smartphone market in the first quarter of 2013 by Strategy Analytics, LG is not even among the top seven in the third quarter of this year after losing ground to Chinese smartphone makers like Huawei, Xiaomi, Oppo and Vivo, research firm Counterpoint says.

"It knows it is competing with Chinese competitors, not Apple or Samsung, and it is trying to add to its lower-end models' value for the price, by using original design manufacturers that Chinese firms use," Tom Kang, an analyst at Counterpoint, said.

"But even if LG sources its products, without marketing ability, it cannot win against Chinese firms who are good at it," Kang added.

LG had said in October last year it will expand ODM to its mid-range smartphones line-up from just low-end smartphones.

(Reporting by Joyce Lee; Editing by Alexander Smith)


ę Reuters 2020
Stocks mentioned in the article
ChangeLast1st jan.
APPLE INC. -1.17% 161.84 Delayed Quote.24.18%
HUALAN BIOLOGICAL ENGINEERING INC. 0.49% 28.45 End-of-day quote.-32.65%
LG CORP. 0.61% 82000 End-of-day quote.-14.57%
LG ELECTRONICS INC. 0.00% 122000 End-of-day quote.-9.63%
SAMSUNG ELECTRONICS CO., LTD. -0.26% 75600 End-of-day quote.-6.67%
XIAOMI CORPORATION 0.72% 19.66 End-of-day quote.-40.78%
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Analyst Recommendations on SAMSUNG ELECTRONICS CO., LTD.
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Financials
Sales 2021 276 846 B 234 B 234 B
Net income 2021 39 539 B 33,5 B 33,5 B
Net cash 2021 109 057 B 92,4 B 92,4 B
P/E ratio 2021 12,6x
Yield 2021 1,92%
Capitalization 508 259 B 429 B 430 B
EV / Sales 2021 1,44x
EV / Sales 2022 1,27x
Nbr of Employees -
Free-Float 82,7%
Chart SAMSUNG ELECTRONICS CO., LTD.
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Samsung Electronics Co., Ltd. Technical Analysis Chart | A005930 | KR7005930003 | MarketScreener
Technical analysis trends SAMSUNG ELECTRONICS CO., LTD.
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TrendsBullishNeutralBearish
Income Statement Evolution
Consensus
Sell
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Mean consensus BUY
Number of Analysts 40
Last Close Price 75 600,00 KRW
Average target price 97 100,00 KRW
Spread / Average Target 28,4%
EPS Revisions
Managers and Directors
Hyun-Suk Kim Co-President, Co-CEO & Director
Dongjin Koh Co-President, Co-CEO & Director
Kinam Kim President, Co-CEO & Director
Tae Moon Roh Co-President & Head-Research & Development
Hee-Chan Roh Chief Financial Officer
Sector and Competitors
1st jan.Capi. (M$)
SAMSUNG ELECTRONICS CO., LTD.-6.67%429 418
APPLE INC.24.18%2 655 211
XIAOMI CORPORATION-40.78%62 715
WINGTECH TECHNOLOGY CO.,LTD34.71%26 040
SHENZHEN TRANSSION HOLDINGS CO., LTD.5.82%20 242
HTC CORPORATION177.07%2 518