[Click eStock] "LB Semicon, Strong Performance Expected in Q1"

[Asia Economy Reporter Song Hwajeong] Shinhan Financial Investment maintained a 'Buy' rating and a target price of 22,000 KRW for LB Semicon on the 15th, expecting strong performance in the first quarter of this year following the fourth quarter of last year.

LB Semicon recorded sales of 120.3 billion KRW and operating profit of 15.9 billion KRW in the fourth quarter of last year. This represents increases of 21% and 75%, respectively, compared to the same period last year. Kangho Oh, a researcher at Shinhan Financial Investment, said, "Growth was driven by expanded sales at headquarters due to increased demand for DDI, a driving chip that renders display colors," adding, "The overall operating profit margin rose by 4.1 percentage points year-on-year to 13.3%."

Shinhan Financial Investment forecasted that LB Semicon's first-quarter sales would increase by 19% year-on-year to 116.6 billion KRW, and operating profit would grow by 28% to 15.9 billion KRW, continuing the strong performance. Researcher Oh explained, "With increased utilization rates due to expanded demand in the DDI sector, sales growth in the assembly segment's COG (Chip On Glass) and the subsidiary's COF (Chip On Film) will steadily continue."

In particular, sales growth of the main product, DDI, is expected this year. Researcher Oh analyzed, "DDI sales growth depends on demand driven by the display market expansion," adding, "A favorable market environment is positive due to increased demand for organic light-emitting diode (OLED) panels, expanded applications, and an increase in the number of DDI IC chips within applications."

From this year, the effects of facility investments are also expected to be reflected. Researcher Oh stated, "We have expanded production facilities in response to increased customer investments, broadening the product portfolio from existing DDI and PIMC-focused testing to CIS," forecasting, "This year's sales and operating profit will reach 546.5 billion KRW and 62.4 billion KRW, respectively, representing increases of 23% and 46% compared to the previous year."

Researcher Oh added, "There is sufficient growth momentum due to increased demand from application diversification, the reflection of expansion effects, and increased DDI mounting quantities driven by OLED expansion."

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