[Click eStock] "LG Innotek, H2 Earnings Improvement Expected... Target Price Up 38%"

[Asia Economy Reporter Minji Lee] Korea Investment & Securities maintained a buy rating on LG Innotek on the 21st and raised the target price by 38% from the previous level to 180,000 KRW.

Cholhee Cho, a researcher at Korea Investment & Securities, said, "The North American client launched the new model in April without concerns, and the smartphone industry in the Greater China region recovered faster than expected," adding, "The new model of the client, to which camera modules will be intensively supplied in the second half of this year, is expected to proceed without major issues."

China was the first to be affected by COVID-19, but signs of business recovery have appeared since March. Domestic handset (smartphone + feature phone) shipments in China decreased by 56% year-on-year in February, but the decline narrowed to 23% in March. Huawei also announced at the global conference held at the end of March that the three major Chinese telecom companies are maintaining their 5G investment plans set at the beginning of the year.

Researcher Cholhee Cho explained, "The momentum related to the increase in 5G smartphone shipments in China is expected to be postponed to the second half of the year," adding, "It is expected to benefit in conjunction with the new model launch of the North American client."

The estimated sales for the first quarter are 1.8254 trillion KRW, and operating profit is 109.1 billion KRW. Although an operating loss of 11.4 billion KRW was recorded in the first quarter of last year, a significant increase in profits is expected. Researcher Cholhee Cho explained, "Camera modules for the mid-to-low-end new models of the North American client, which were uncertain in the first half, seem to have been shipped without issues," adding, "It is observed that 3D sensing was installed for the first time in the client’s new tablet product."

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