[Click eStock] "LG Innotek, Strong Q2 Earnings Expected... Benefits from New Model Launches in Second Half"

[Asia Economy Reporter Oh Ju-yeon] Kiwoom Securities maintained its 'Buy' rating and target price of 190,000 KRW for LG Innotek on the 10th, stating that LG Innotek's second-quarter performance this year is expected to be better than anticipated.

LG Innotek's operating profit for the second quarter is forecasted to reach 41.7 billion KRW, a 122% increase compared to the same period last year, surpassing the market consensus of 19.6 billion KRW.

Researcher Kim Ji-san analyzed, "The optical solutions segment is expected to benefit more favorably than anticipated from new models such as the 2nd generation iPhone SE and iPad Pro, minimizing the impact of the off-season. The substrate materials segment continues its performance improvement trend due to strong sales of high value-added product lines, and the exchange rate environment remains positive." However, he predicted that the automotive components segment will see a wider deficit due to weaker-than-expected demand in the upstream market.

Researcher Kim added, "The semiconductor substrate segment is seeing increased demand for 5G mmWave antenna module substrates (SiP), and through proactive responses based on an excellent customer base, it is leading supply. The display components segment is exposed to high value-added areas such as 10.5 generation panels, which helps overcome the weak TV demand during the pandemic phase."

It is expected to benefit from new model launches in the second half of the year.

Researcher Kim stated, "Based on market information, only some of the top 5G mmWave-supported models are likely to be delayed, and the impact will be within a predictable range." He forecasted, "In the new model environment, LG Innotek's optical solutions will see a significant increase in revenue per unit based on the adoption of a new ToF-type 3D module, improvements in the highest-end triple camera specifications, and ASP increases, and will lead the supply of high-end segments such as triple cameras and ToF 3D modules."

He explained that if the launch delay issues are minimized, strong performance exceeding the second half of last year is expected.

Researcher Kim also mentioned, "Efforts to improve efficiency in the LED business following HDI will also contribute to enhancing corporate value."

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