LG Electronics Inc. (066570), the world’s third-largest maker of mobile phones, rose the most in more than a month in Seoul trading amid optimism that its handset business may have returned to profit.
LG advanced 4.1 percent to 77,100 won at the 3:00 p.m. close, the highest level since Dec. 21. The benchmark Kospi index rose 0.1 percent to 1,952.23.
LG, whose handset unit has lost money for six straight quarters, said in November it plans to raise 1.06 trillion won ($940 million) in a rights offer and will invest more than half the proceeds in turning around the unprofitable mobile-phone business. LG’s shares dropped 35 percent over the past 12 months, while its rival Samsung Electronics Co. (005930) gained 14 percent.
“The current share price is pretty low compared to other tech stocks,” Kim Woon Ho, a Seoul-based analyst at Hanwha Securities Co., said by telephone “We’ve been telling investors to reduce holdings of other stocks and buy LG lately.”
The handset division probably returned to profit in the fourth quarter, Kim said. Sales at the air conditioning business will start picking up in the first quarter, while other technology companies typically report slower sales in that period from the previous quarter, he said.
The Seoul-based company will report fourth-quarter earnings.
Samsung Electronics Co. continued its advance today, closing at record 1.114 million won in Seoul.
Hynix Semiconductor Inc. (000660), which supplies memory chips to Apple Inc., rose 1.9 percent to 27,450 won. Apple yesterday reported quarterly profit that more than doubled after a record 37 million iPhones were sold in the fiscal first quarter.
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