LG CNS (064400) 🔎 In-depth
KOSPI · Price as of 2026-08-06 · Updated 2026-08-09
LG CNS earns money by designing, building and operating IT systems for companies and public institutions, and its center of gravity has shifted away from traditional systems integration and maintenance: as of Q1 2026, AI and cloud make up about 58% of revenue (₩765.4 billion), alongside digital business services and smart engineering. Partnering with the likes of OpenAI and Palantir to broaden corporate AI transformation, and winning contracts to build data centers and operate them long-term, lifted profit — Q1 net profit rose 41.2% — and a dividend of ₩1,850 per share (yield about 2.7%) showed capacity for shareholder returns. What stands out lately is a balance: among large IT-services names it has the highest ROE (14.9%) and lowest P/E, and its AI/cloud shift is actually visible in both revenue and profit, while the cautions are the sector's characteristic seasonality, its reliance on affiliate work, and short-term volatility owing to a brief price history following its 2025 listing.
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30-second brief
Pulled directly from the computed values below — not a separately written opinion.
What do the SourceComputedEstimateReading tags mean?
Source filings and exchange data · Computed calculated from public data · Estimate our own unverified projection · Reading drafted automatically, then rule-checked. See AI & Automation.
Core valuation metric
This stock's effective sub-sector is “IT Services (SI & Solutions)” (Internet, Platforms & Software), a type typically read first through P/E.
IT services (systems integration and solutions) tends to earn steadily off project wins and maintenance contracts. Value here comes from people and contracts rather than physical assets, so price-to-earnings (P/E) — the price measured against actual net profit — fits best.
Price against earnings alone becomes unstable when earnings swing. Reading it together with price against assets helps gauge the downside.
This note explains how each sector is typically valued and is educational context only, not investment advice.
At-a-glance assessment financial health · growth · profitability · valuation
- Debt ratio, current ratio and interest burden all look healthy.
- Revenue rose 2.5% year over year, and the pace is slowing (3-year trend: rising).
- Most recent quarter (Q1 2026) revenue was 8.6% higher than a year earlier.
- ROE is 15.8% (controlling-interest basis). It is above the sector average.
- Operating margin is 9.1%.
- The forward P/E sits below the sector median.
Ownership & governance As of 2025-12-31
Largest shareholder LG 44.96% (corporate)
Controlling bloc incl. related parties 45.96%
With the controlling bloc holding 46%, the ownership structure is stable.
🔎 In-depth analysis Reading
LG CNS earns money by designing, building and operating IT systems for companies and public institutions. In the past its core was systems integration (SI) — building computer systems for group affiliates and financial and public-sector clients — and the maintenance (SM) that keeps them running, but the center of gravity has since shifted. As of Q1 2026, AI and cloud account for about 58% of revenue (₩765.4 billion), joined by digital business services that handle companies' digital operations on their behalf (₩321.9 billion) and smart engineering that builds and runs data centers (₩227.8 billion). Recently, partnering with global firms such as OpenAI and Palantir has broadened corporate AI-transformation (AX) projects, and contracts that build data centers and operate them long-term (DBO) are lifting profit.
The latest close is ₩72,100 and the market capitalization is ₩7.0 trillion. The price sits above its 20-day moving average (₩65,790) and below its 60-day moving average (₩81,313). Short-term and medium-term trends are diverging, so the direction is best read separately. The RSI (a supplementary indicator that gauges the strength of gains versus losses over the past 14 days on a 0-100 scale) is 53.0, a neutral level. The one-month change is -2.6%, the three-month change is +7.6%, and the position relative to the 52-week high is -49.8%. Relative strength versus the KOSPI is 44 (on a 1-99 scale, converted from returns against the index over the past year with more weight on recent performance; higher means stronger than the market). It is stronger than roughly 44% of all stocks. Over the past three months it outpaced the index by 26.7%. Chart interpretation is best done alongside trading volume and the dates on which disclosures occur.
Profitability is this company's most distinct strength. ROE (how much it earns in a year on its equity) is 14.9%, well above the IT-services sector average. The operating margin is 9.0% and the net margin is 7.1%. The balance sheet is stable: the debt ratio (debt relative to equity) is a low 79.9%, the current ratio is 213%, and interest coverage of 16.5x means servicing debt is comfortable. The dividend is ₩1,850 per share (yield about 2.7%), returning about 40.9% of net profit to shareholders (payout ratio). On valuation, the P/E ratio (how many times one year's earnings the price is) is 15.95x and the P/B (how many times net assets) is 2.39x, but this P/E is on last year's finalized earnings at a company whose results already rise every year. With net profit still climbing, it is closer to the real picture to judge cheap-or-expensive on this year's expected earnings rather than on the trailing P/E alone.
The three-year trend is steady. Net profit rose from ₩332.3 billion in 2023 to ₩364.5 billion in 2024 and ₩437.9 billion in 2025, with the 2025 gain of +20.1% actually an acceleration. Revenue and operating profit also grow every year (2025 revenue ₩6.13 trillion, operating profit ₩551.8 billion). Q1 2026 delivered revenue of ₩1,315.0 billion (+8.6%), operating profit of ₩94.2 billion (+19.4%) and net profit of ₩80.9 billion (+41.2%), with the net-profit gain especially large. In IT services, projects wrap up at year-end, making the fourth quarter the seasonal peak and the first quarter the trough, so a drop in revenue versus the prior fourth quarter is recurring seasonality, not weak performance. The reasons to expect continued earnings growth this year are clear: relatively higher-margin AI and cloud have grown to 58% of revenue, and large financial-sector projects plus long-term data-center operating contracts underpin profit. Reflecting this, the P/E on this year's expected earnings falls to around 13x, below last year's finalized basis (15.1x) — so on a forward basis it actually looks cheaper.
Recent disclosures concentrate on earnings and investor relations. Finalized 2025 annual (consolidated) results were disclosed on April 30, 2026, preceded by a settlement-results disclosure notice on April 16. On May 15 the Q1 2026 quarterly report was filed, confirming the strong Q1 (net profit +41.2%) in figures. On dividends, ₩1,850 per share (yield about 2.7%, payout about 40.9%) shows capacity for shareholder returns despite the growth profile. In June, a run of routine IR sessions showed the company expanding investor communication, and disclosures on corporate governance and affiliate transactions also went up, revealing its structure as an LG-group company.
The strengths are clear. Among large IT-services names it has the highest ROE (14.9%) yet the lowest P/E and the highest dividend yield — that is, its price is cheap relative to profitability — and crucially its shift toward AI and cloud is actually visible in the revenue mix (58%) and in profit (Q1 net profit +41%). There are cautions too. IT services carry strong seasonality, so quarterly results swing widely (Q4 peak, Q1 trough), and a high share of affiliate work makes it sensitive to the group's investment cycle. Quarterly profit can swing with the timing of large contract wins, and the brief price history following its 2025 listing means short-term volatility should be kept in mind. In sum, when affiliate IT demand and external AX and data-center contracts continue, the structure shows both high profitability and growth; conversely, if large contracts are delayed or affiliate investment contracts, the pace of growth can slow.
🔎 Valuation vs peers Undervalued
The peer set is built from listed domestic large IT-services (systems integration) and enterprise-IT companies. The closest business fit is Samsung SDS, with Hyundai AutoEver (captive automotive IT) and POSCO DX (industrial and smart-factory IT) included as reference peers.
| Peer | P/E | P/B | ROE |
|---|---|---|---|
| Samsung SDS | 23.69x | 1.81x | 6.39% |
| Hyundai AutoEver | 62.67x | 6.28x | 9.95% |
| POSCO DX | 60.13x | 5.62x | 6.18% |
Against the closest business fit, Samsung SDS, LG CNS has a lower P/E (15.1x versus 20.3x) while its ROE is roughly double (14.9% versus 7.7%). Hyundai AutoEver and POSCO DX carry high multiples in the 60-80x P/E range, making LG CNS's relative cheapness even more pronounced. A trailing P/E of 15.1x is a lagging measure at a company whose earnings grow every year; reflecting this year's expected earnings, the multiple falls to around 13x, and weighing profitability, dividend and growth together, we judge it undervalued relative to peers. That said, its smaller business scale versus Samsung SDS and its higher reliance on affiliate volume are discount factors.
Price history Close · MA20 · MA60
The latest close is ₩72,100 and the market capitalization is ₩7.0 trillion. The price sits above its 20-day moving average (₩65,790) and below its 60-day moving average (₩81,313). Short-term and medium-term trends are diverging, so the direction is best read separately. The RSI (a supplementary indicator that gauges the strength of gains versus losses over the past 14 days on a 0-100 scale) is 53.0, a neutral level. The one-month change is -2.6%, the three-month change is +7.6%, and the position relative to the 52-week high is -49.8%. Relative strength versus the KOSPI is 44 (on a 1-99 scale, converted from returns against the index over the past year with more weight on recent performance; higher means stronger than the market). It is stronger than roughly 44% of all stocks. Over the past three months it outpaced the index by 26.7%. Chart interpretation is best done alongside trading volume and the dates on which disclosures occur.
Relative performance stock vs index · start = 100
Excess return vs index · 3M +26.69% / 6M -15.66% / 12M -48.10%
Key metrics Computed vs sector median
Valuation
The P/E of 15.95x is above the sector median (12.01x). The P/B of 2.39x is above the sector median (0.81x).
Enterprise value (EV)
EV = market cap + net debt. It reflects cash and debt, so it captures the real cost of the whole business that market cap alone misses; lower multiples are cheaper relative to earnings or sales.
Intrinsic value (DCF estimate) Estimate
Model output — not a price target. This is what the formula returns under the assumptions below, not a view on where the share price should go.
DCF (discounted cash flow) estimate — discount rate 10.4%, initial growth 10.0%→terminal 2.0%, 10-yr forecast, free-cash-flow basis, forward earnings power normalized 1.171x. A reference range that shifts materially with assumptions.
Profitability & financials
Return on equity (ROE) is 15.8%, above the sector average (6.0%). The operating margin is 9.1%. The debt ratio is 63.3%, so the financial structure is stable.
Growth FY2025 · annual report (consolidated)
| Item | 2023 | 2024 | 2025 | YoY |
|---|---|---|---|---|
| Revenue | $3.9B | $4.2B | $4.3B | +2.46% ↓ slower |
| Operating profit | $326.0M | $360.3M | $387.7M | +7.60% ↓ slower |
| Net profit | $233.5M | $256.1M | $307.6M | +20.13% ↑ faster |
| 5-year | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue | — | — | $3.9B | $4.2B | $4.3B |
| Operating profit | — | — | $326.0M | $360.3M | $387.7M |
| Net profit | — | — | $233.5M | $256.1M | $307.6M |
| Revenue CAGR | 2-yr avg 4.57% | ||||
Revenue rose 2.5% year over year (2023 ₩5.6 trillion → 2024 ₩6.0 trillion → 2025 ₩6.1 trillion), and the three-year trend is 'rising'. That said, the pace of growth slowed from the prior year. Operating profit rose 7.6% year over year. The pace of that profit growth is gradually easing. Over the 3 years on record, revenue compound annual growth (CAGR) is 4.6%. The two-year revenue CAGR is 4.6%. In the most recent quarter (Q1 2026), revenue was 8.6% higher than the same period a year earlier.
Latest quarterly results Source Q1 2026 · vs year-ago
Technical indicators Computed
What stands out
- P/E and P/B are both low versus peers, so the price looks inexpensive relative to earnings and assets.
- ROE of 15.8% points to solid profitability.
- The balance sheet is stable in terms of debt and liquidity.
Points to watch
- Revenue rose 2.5% year over year, and the pace is slowing (3-year trend: rising).
Recent news & events searched · sourced
- 2026-04-30EarningsFinalized 2025 annual (consolidated) results disclosed. Revenue ₩6.13 trillion, operating profit ₩551.8 billion, net profit ₩437.9 billion (net profit +20.1% YoY).Short term: officially confirms the acceleration in net profit. Medium term: supports the durability of the three-year uptrend in earnings. Source
- 2026-05-15EarningsQ1 2026 quarterly report filed. Revenue ₩1,315.0 billion (+8.6%), operating profit ₩94.2 billion (+19.4%), net profit ₩80.9 billion (+41.2%).Short term: confirms the strong Q1. Medium term: the AI/cloud shift (58% of revenue) and data-center contract effects are confirmed in the profit gain. Source
- 2026-04-16FilingSettlement-results disclosure notice (informational). Schedule guidance for the annual finalized-results announcement.Short term: limited impact as pre-results schedule guidance. Medium term: the starting point for reviewing results. Source
- 2026-06-02IRIR (investor presentation) notice. Investor communication expanded on a regular basis in June.Short term: an opportunity to explain the business and strategy. Medium term: an official channel to gauge the AI/cloud direction and contract flow. Source
Figure cross-check computed ↔ external
Recent filings Source
- 2026-06-02Disclosure
- 2026-06-01Disclosure
- 2026-06-01Large-business-group status disclosure
- 2026-06-01Corporate governance report
- 2026-05-15PeriodicQuarterly report
- 2026-05-11Disclosure
- 2026-05-06Disclosure
- 2026-05-06Disclosure
- 2026-04-30Disclosure
- 2026-04-30EarningsFair-disclosure notice
- 2026-04-16EarningsEarnings disclosure
- 2026-04-16Disclosure
📖 Plain-language glossary — expand if you are new to this
- P/E
- How many times a year's net profit the price is worth (lower is cheaper relative to earnings). The P/E here is on trailing (last full-year) results; for companies whose earnings swing fast (memory chips and other cyclicals/high-growth), a forward P/E on this year's expected earnings is more accurate.
- P/B
- Price relative to net assets (equity). Around 1x means it trades near book value; below 1x means below book.
- P/S
- Price relative to a year's revenue — useful for growth companies with thin earnings.
- Net debt / EV
- Net debt = interest-bearing debt − cash. Negative means more cash than debt (net cash). EV (enterprise value) = market cap + net debt, closer to what it would cost to buy the whole business.
- EV/EBIT · EV/EBITDA · EV/Sales
- Enterprise value against operating profit (EBIT), EBITDA, or revenue. Unlike P/E these reflect debt and cash; lower is cheaper relative to earnings power or sales.
- FCF / FCF yield
- Free cash flow = operating cash − capex, the cash actually left over. FCF yield = FCF ÷ market cap; higher means more cash generated per unit of market value.
- Intrinsic value (DCF)
- Future free cash flow (or, for some capex-heavy but profitable names, forecast earnings) discounted to today to estimate per-share value. Because it shifts a lot with the discount-rate and growth assumptions, it is shown as a bear/base/bull range, and the basis and assumptions are disclosed in one line beneath it.
- ROE
- How much profit the company earns in a year on its equity (%). Higher means better returns on capital.
- EPS / BPS
- Earnings per share / net assets (book value) per share.
- Operating / net margin
- Profit left from the core business / final profit after tax and interest, per unit of revenue.
- Debt ratio
- Debt relative to equity (%). Higher means more reliance on borrowing (norms vary by sector).
- Current ratio
- Assets convertible to cash within a year against debt due within a year. Above 100% leaves some short-term headroom.
- Interest coverage
- How many times operating profit covers the interest owed. Below 1x means operating profit alone struggles to cover interest.
- Dividend yield / payout ratio
- The year's dividend as a % of today's price / the share of earnings paid out as dividends.
- Revenue CAGR
- Multi-year growth expressed as a single yearly average (compound annual growth rate).
- RSI (short-term signal)
- Whether recent price action is overheated or beaten down. Above 70 is overbought, below 30 oversold.
- MA20 / MA60 (moving averages)
- The 20- and 60-day average price. Price above them signals a firmer short-term trend.
- vs 52-week high
- How far below the past year's peak the price sits now (%).
All figures are for reference only; how they read varies by sector and over time.
Sources: Korea FSC market-price API (data.go.kr), OpenDART, KRX/KIND — public data only.
Bong Stocks presents public-data-based information for reference only. It is not investment advice and contains no target prices, ratings, or buy/sell recommendations. Verify independently before making any decision.