[Click eStock] LG Innotek Forecasts 488 Billion KRW Operating Profit This Year... 30% Increase YoY

Record High Sales and Operating Profit Expected Due to Strong Shipments of Smartphone Camera Components

[Asia Economy Reporter Minwoo Lee] LG Innotek is expected to continue its upward trend into the new year. Last year, the shipment volume of smartphone triple cameras was substantial, and with the increase in 5G phone launches this year, it is analyzed that the company could achieve record-high performance.

On the 2nd, Daishin Securities raised its forecast for LG Innotek's Q4 sales and operating profit for last year. Sales were increased from KRW 2.734 trillion to KRW 2.853 trillion, and operating profit was raised from KRW 151 billion to KRW 181 billion. This is due to favorable shipments of smartphone triple cameras and shipment volumes of 3D sensing-related components exceeding previous estimates. Additionally, high operating rates driven by semiconductor PCBs and tape substrates mix effects were cited as major positive factors.

This upward momentum is expected to continue this year as well. Efforts to improve efficiency by discontinuing the HDI (High-Density Interconnect) business in Q4 last year and low-profit businesses are proving effective, while additional sales from strategic customers are anticipated. Daishin Securities forecasts LG Innotek's sales this year to reach KRW 8.678 trillion and operating profit to hit KRW 488 billion, marking record highs. Compared to last year, sales are expected to increase by 5.9% and operating profit by 30.1%.

Researcher Kangho Park of Daishin Securities explained, "Since strategic customers are expected to newly apply ToF (Time of Flight) cameras that measure object depth on the rear of smartphones this year, additional sales as a main supplier are anticipated. Especially, if these are launched as 5G phones, the overall shipment volume will increase, potentially boosting triple (three) camera supply, thereby increasing customers' dependence on LG Innotek." He added, "With the discontinuation of the loss-making HDI business and ongoing management efficiency improvements in the LED division, fixed cost burdens will decrease compared to before. Along with definite additional sales in optical solutions, additional margins from semiconductor substrates, and recovery of profitability in automotive components, operating profit estimates may rise further."

Daishin Securities gave LG Innotek a 'Buy' investment rating with a target stock price of KRW 170,000. The closing price on the 30th of last month was KRW 140,000.

This content was produced with the assistance of AI translation services.