[Click eStock] "LG Innotek, Record-Breaking Q1 Earnings Expected"

[Asia Economy Reporter Minji Lee] DB Financial Investment maintained its buy rating and target price of 270,000 KRW for LG Innotek, expecting the company to deliver record-breaking quarterly earnings in the first quarter.

On the 25th, DB Financial Investment raised LG Innotek's first-quarter operating profit forecast from 206 billion KRW to 311.4 billion KRW, a 13% increase. This represents approximately a 125% rise compared to the same period last year. The market consensus is 256 billion KRW, showing a continuous upward trend.

Researcher Kwon Seong-ryul of DB Financial Investment said, "Not only is this the highest quarterly performance ever, but it also approaches the operating profit of 342.3 billion KRW recorded in the previous peak season of the fourth quarter." He added, "Strong smartphone sales from overseas strategic customers and a product mix focused on high-end lineups are positively impacting LG Innotek's optical solutions performance."

Optical solutions sales in the first quarter are expected to reach 2.3 trillion KRW, an increase of over 1 trillion KRW compared to the same period last year. The substrate materials division is expected to see profitability improvements mainly from TV components, and a turnaround is also anticipated in the automotive components division.

Even with a conservative outlook beyond the second quarter of next year, considering the launch of new models in the second half, an increase in sensor-shifted model lineups, and the expanded application of ToF (Time of Flight) technology, electronic operating profit is expected to approach 1 trillion KRW next year.

Researcher Kwon said, "Considering last year's operating profit of 681 billion KRW, a remarkable improvement in performance is expected." He explained, "While the results will be centered on optical solutions, we should also observe structural changes such as the automotive components division achieving annual profits and the elimination of the chronically deficit LED division."

He continued, "The company's competitiveness in optical solutions performance and technology is at a top-tier level among global optical component companies, but compared to similar industries like Sunny Optical, O-Film, and Largan Precision, it has not been properly evaluated. It is urgent to recognize its true value."

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