LG CNS earns its money by designing, building, and operating IT systems for companies and public institutions. Its center of gravity has shifted away from the traditional system-integration and maintenance business: as of Q1 2026, AI and cloud work makes up roughly 58% of revenue (₩765.4 billion), with digital business services and smart engineering rounding out the mix. Partnerships with the likes of OpenAI and Palantir are widening its enterprise AI-transformation work, and it also builds data centers and takes on their long-term operation, orders that lifted Q1 net profit by 41.2%. It paid a dividend of ₩1,850 per share (a yield of about 2.4%), showing room for shareholder returns as well. The strengths to note are that it carries the highest ROE (14.9%) and the lowest P/E among the large IT-services names, and that its AI and cloud shift is showing up in real revenue and profit. The cautions are the seasonality typical of IT services, the share of work coming from group affiliates, and the short-term volatility that follows from a limited price history after its 2025 listing.
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.
- Even versus the prior quarter (Q4 2025), revenue was 32.1% lower.
- ROE is 14.9% (controlling-interest basis). It is above the sector average.
- Operating margin is 9.0%.
- 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
- LG CNS earns its money by designing, building, and operating IT systems for companies and public institutions.
- In the past its core was system integration (SI) — building the computer systems of group affiliates and financial and public-sector clients — along with the maintenance (SM) that keeps them running.
- Today the weight of the business has moved.
- As of Q1 2026, AI and cloud work accounts 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 and similar facilities (₩227.8 billion).
- More recently it has teamed up with global players such as OpenAI and Palantir to expand enterprise AI-transformation (AX) projects, and orders to build and then operate data centers over the long term (a DBO model) are lifting profit.
- The latest close is ₩69,100 and the market cap is ₩6.7 trillion.
- The price sits below its 20-day line (₩81,385) and below its 60-day line (₩81,620).
- Trading below both its short- and mid-term moving averages, the trend looks subdued.
- The RSI (a supplementary gauge that weighs up-days against down-days over the past 14 days on a 0-100 scale) is 35.9, a neutral reading.
- The one-month change is -26.3%, the three-month change is +21.0%, and the price is -51.9% from its 52-week high.
- Relative strength versus the KOSPI is 34 (on a 1-99 scale that converts the past year's return against the index with more weight on recent moves; higher means stronger than the market).
- That places it in roughly the top 32% of all stocks by strength.
- Over the past three months it lagged the index by 9.4%.
- It is best to read the chart alongside trading volume and disclosure dates.
- Profitability is the company's clearest strength.
- ROE (how much it earns in a year on its equity) is 14.9%, well above the average for the IT-services sector.
- Its operating margin is 9.0% and net margin is 7.1%.
- The balance sheet is stable: the debt ratio (debt against equity) is a low 79.9%, and with a current ratio of 213% and an interest-coverage ratio of 16.5x, servicing debt is no strain.
- The dividend is ₩1,850 per share (a yield of about 2.4%), returning roughly 40.9% of net profit to shareholders (the payout ratio).
- On valuation, the P/E (how many times a year's profit the price reflects) is 15.29x and the P/B (price against net asset value) is 2.28x, but this P/E rests on last year's confirmed profit for a company whose earnings already rise every year.
- With net profit on a steady upward path, rather than judging cheap or expensive on last year's P/E alone, this year's expected profit gives a picture closer to reality.
- 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, up 20.1% year on year in 2025 — an acceleration rather than a slowdown.
- Revenue and operating profit are also rising each year (2025 revenue ₩6.13 trillion, operating profit ₩551.8 billion).
- In Q1 2026, revenue was ₩1,315.0 billion (+8.6%), operating profit ₩94.2 billion (+19.4%), and net profit ₩80.9 billion (+41.2%), with the net-profit gain especially large.
- IT services wrap up projects at year-end, making the fourth quarter the seasonal peak and the first quarter the trough, so a drop in revenue from the prior fourth quarter reflects a recurring seasonal pattern, not weakness.
- The case for continued profit growth this year is clear: the higher-margin AI and cloud business has 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 profit works out to about 14.8x, below last year's confirmed 16.9x — so on a forward basis it actually looks cheaper.
- Recent disclosures center on results and investor relations.
- On April 30, 2026, the full-year 2025 (consolidated) results were confirmed, following an April 16 advance notice of the earnings disclosure.
- On May 15, the Q1 2026 quarterly report was filed, confirming the strong quarter (net profit +41.2%) in the numbers.
- On the dividend side, the ₩1,850-per-share payout (a yield of about 2.4%, a payout ratio of about 40.9%) shows room for shareholder returns alongside its growth profile.
- In June, a series of regular IR events pointed to expanded investor communication, and disclosures on corporate governance and affiliate transactions were also filed, opening up structural information on the company as an LG group affiliate.
- The strengths are distinct.
- Among the large IT-services names, it has the highest ROE (14.9%) yet the lowest P/E and the highest dividend yield.
- In other words the price is cheap relative to profitability, and the shift toward AI and cloud is showing up in real terms — in the revenue share (58%) and in profit (Q1 net profit +41%).
- There are cautions too.
- IT services carry heavy seasonality, so quarterly results swing widely (fourth-quarter peak, first-quarter trough), and a high share of work from group affiliates ties the company to the group's investment cycle.
- Quarterly profit can wobble with the timing of large orders, and the short price history since the 2025 listing adds short-term volatility.
- In sum, when affiliate IT demand and outside AX and data-center orders keep flowing, high profitability and growth appear together; conversely, if large orders slip or affiliate investment pulls back, growth can slow.
🔎 Valuation vs peers Undervalued
The peer set comprises listed Korean large-cap IT-services (system-integration) and enterprise-IT companies, with Samsung SDS as the closest in business structure and 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 | 19.18x | 1.47x | 7.66% |
| Hyundai AutoEver | 65.07x | 6.43x | 9.88% |
| POSCO DX | 56.13x | 5.13x | 9.14% |
Against Samsung SDS, whose business is most similar, LG CNS trades at a lower P/E (16.9x versus 20.1x) while its ROE is roughly double (14.9% versus 7.7%). Hyundai AutoEver and POSCO DX carry high P/Es in the 60-80x range, which makes LG CNS's relative cheapness stand out more. A trailing P/E of 16.9x on last year's confirmed profit is a lagging measure for a company whose earnings rise every year. Reflecting this year's expected profit, that multiple falls to about 14.8x, and taking profitability, dividend, and growth together, we judge it undervalued relative to peers.
Price history Close · MA20 · MA60
The latest close is ₩69,100 and the market capitalization is ₩6.7 trillion. The price sits below its 20-day moving average (₩81,385) and below its 60-day moving average (₩81,620). It is under both its short- and medium-term moving averages, so the trend looks subdued. The RSI (a supplementary indicator that gauges the strength of gains versus losses over the past 14 days on a 0-100 scale) is 35.9, a neutral level. The one-month change is -26.3%, the three-month change is +21.0%, and the position relative to the 52-week high is -51.9%. Relative strength versus the KOSPI is 34 (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 34% of all stocks. Over the past three months it lagged the index by 9.4%. 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 -9.37% / 6M -31.82% / 12M -62.09%
Key metrics vs sector median
Valuation
The P/E of 15.29x is below the sector median (19.18x). The P/B of 2.28x is above the sector median (1.93x).
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)
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 1.139x. A reference range that shifts materially with assumptions.
Profitability & financials
Return on equity (ROE) is 14.9%, above the sector average (10.0%). The operating margin is 9.0%. The debt ratio is 79.9%, so the financial structure is stable.
Growth FY2025 · annual report (consolidated)
| Item | 2023 | 2024 | 2025 | YoY |
|---|---|---|---|---|
| Revenue | $3.7B | $4.0B | $4.1B | +2.46% ↓ slower |
| Operating profit | $307.6M | $339.9M | $365.7M | +7.60% ↓ slower |
| Net profit | $220.3M | $241.6M | $290.2M | +20.13% ↑ faster |
| 5-year | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue | — | — | $3.7B | $4.0B | $4.1B |
| Operating profit | — | — | $307.6M | $339.9M | $365.7M |
| Net profit | — | — | $220.3M | $241.6M | $290.2M |
| 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. Because quarterly results are relatively even in this industry, revenue also came in 32.1% lower than the prior quarter (Q4 2025), so the recent trend looks soft.
Latest quarterly results Q1 2026 · vs year-ago + prior quarter
Technical indicators
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 14.9% 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
- 2026-04-30EarningsFull-year 2025 (consolidated) results confirmed. Revenue ₩6.13 trillion, operating profit ₩551.8 billion, net profit ₩437.9 billion (net profit +20.1% year on year).Short term: officially confirms accelerating net profit. Medium term: supports the durability of a three-year upward profit trend. 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 a strong first quarter. Medium term: the AI and cloud shift (58% of revenue) and data-center order effects are confirmed in rising profit. Source
- 2026-04-16FilingAdvance notice of the earnings disclosure (informational). Notice of the schedule for the full-year confirmed results.Short term: limited effect as a pre-confirmation schedule notice. Medium term: a starting point for reviewing results. Source
- 2026-06-02IRIR event notice. Regular investor communication expanded from June.Short term: an opportunity to explain the business and strategy. Medium term: an official channel to gauge the AI and cloud direction and order flow. Source
Figure cross-check computed ↔ external
Recent filings
- 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.