[Click eStock] "LG Innotek, Reflecting iPhone 13 Effect in Second Half... Continued Performance Improvement"

Daishin Securities Report

[Asia Economy Reporter Minji Lee] Daishin Securities maintained its buy rating and target price of 300,000 KRW for LG Innotek on the 3rd, based on the expectation of stable growth in the optical solutions division and substrate materials division in the second half of the year.

Daishin Securities' forecasted operating profit for the third quarter is 303.9 billion KRW, estimated to grow 180% compared to the same period last year. This figure significantly exceeds the previous estimate (273 billion KRW) and market expectations (283 billion KRW). Sales are estimated to increase by 52.8% year-on-year to 3.386 trillion KRW.

Due to the effect of the iPhone 12 released last year, operating profit in the first half of this year is estimated to increase by 117% compared to the previous year. The effect of the iPhone 13, scheduled for release in September this year, is expected to increase operating profit by 38.7% in the second half. Considering that the number of iPhone 13 models applying sensor shift technology has increased to four and that the supply of ToF cameras last year shifted from single units to integrated units, sales and operating profit are expected to rise in the second half due to an increase in average supply prices. Accordingly, the annual operating profit is expected to exceed 1.12 trillion KRW, a 65% increase compared to the same period last year, marking the first time it surpasses 1 trillion KRW.

Park Kang-ho, a researcher at Daishin Securities, said, "LG Innotek's competitiveness in Apple's triple camera sector is solid, and it is expected to remain a key supplier for next year's new model (estimated iPhone 14). Additionally, due to production disruptions at competitors caused by the recent COVID-19 outbreak in Vietnam, additional windfall benefits are expected in the dual camera segment."

Sales in the semiconductor substrate sector are also increasing, which is positive in terms of diversifying revenue sources. LG Innotek is expanding sales centered on new growth substrates such as SiP and AiP, and accordingly, semiconductor substrate sales in the second half are expected to increase by 53% compared to a year ago. Researcher Park Kang-ho analyzed, "With high sales growth driven by Apple's new model launches and the expansion of the 5G market, and considering the supply shortage of FC and CSP, the profitability of substrate solutions is expected to exceed consensus. The mix effect of semiconductor substrates will be maximized this year."

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