[Click eStock] "LG Innotek Expected to Show Significant Q4 Performance Improvement Trend"

[Asia Economy Reporter Oh Ju-yeon] KB Securities stated that LG Innotek's performance improvement trend remains valid, especially expecting a significant improvement in the fourth quarter. Accordingly, they maintained their investment opinion as 'Buy' and the target price at 200,000 KRW.

According to KB Securities, LG Innotek's sales and operating profit this year are estimated to increase by 6% and 38% year-on-year, reaching 8.8 trillion KRW and 557.8 billion KRW respectively, projecting record-high performance.

Researcher Kim Dong-won analyzed, "Due to increased demand for 5G mmWave antenna substrates, expansion of new production capacity in the semiconductor substrate sector is expected to strengthen dominance in semiconductor substrates (global market share No.1) and expand optical solutions sales, and profitability improvement in the automotive components sector is anticipated from the second half."

In the second half, although there is some uncertainty in the third quarter's performance due to production schedule changes caused by delays in new product launches from North American strategic customers, a significant improvement trend is expected in the fourth quarter.

Operating profit in the third quarter is expected to record 80.9 billion KRW, down 57% year-on-year, but in the fourth quarter, it is forecasted to reach 296 billion KRW, up 41% year-on-year.

Researcher Kim diagnosed, "The optical solutions sales are expected to achieve the highest quarterly figure in the fourth quarter, and the substrate materials sector is also expected to maintain high profitability due to increased shipment volume."

Researcher Kim mentioned, "Recently, LG Innotek's stock price has fallen about 19% from the previous intraday high (181,000 KRW on July 10) reflecting concerns such as delays in strategic customers' new product launches, diversification of camera module suppliers, and changes in supply methods," adding, "However, despite the shift in camera module production timing (from August to September) due to delays in strategic customers' new product launches in the second half, optical solutions sales in the second half are expected to approach approximately 4 trillion KRW, and the performance improvement trend remains valid due to increased semiconductor substrate sales driven by demand growth for 5G mmWave antenna substrates."

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