[Click eStock] LG Innotek Expected to Achieve Record-Breaking Performance Over the Next 3 Years

[Asia Economy Reporter Lee Seon-ae] KB Securities announced on the 18th that it maintains a ‘Buy’ rating and a target price of 500,000 KRW for LG Innotek. This is based on the judgment that the company can achieve record-high performance over the next three years.

Yu Woo-hyung, a researcher at KB Securities, stated, “LG Innotek’s sales in 2022 are expected to reach 15.8 trillion KRW, a 6% increase from the previous year, and operating profit is projected to rise 13% to 1.4 trillion KRW, marking the highest performance ever.” He added, “Operating profit is expected to increase 2.1 times in two years.”

The positive outlook is based on expectations that the iPhone will record its highest market share in the global smartphone market in 10 years this year. The semiconductor substrates, which are expected to face supply shortages, are also projected to generate over 400 billion KRW annually in the substrate materials segment due to strong demand. Another factor contributing to performance improvement is the automotive components business securing an order backlog of 10 trillion KRW, which is estimated to turn profitable from the second half of this year.

Based on this business expansion outlook, the stock price is expected to rise. Researcher Yu explained, “Recently, LG Innotek’s stock price fell 15% from its previous peak due to concerns over weak first-quarter earnings, which is typically a low season.” He added, “However, the first quarter of this year is expected to break away from the past low-season earnings pattern due to increased component demand from strategic customers exceeding expectations.” He further noted, “First-quarter sales are expected to reach 3.8 trillion KRW, a 22% increase from the previous year, marking the highest first-quarter sales ever.”

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