[Click eStock] "LG Innotek Performs Well Despite Off-Season... Peak Season Expected"

[Asia Economy Reporter Kwon Jae-hee] DB Financial Investment maintained its 'Buy' rating and target price of 450,000 KRW for LG Innotek.

LG Innotek's operating profit for the second quarter is expected to be 202.9 billion KRW. This represents a 33.6% increase compared to the previous year and exceeds the market consensus of 193 billion KRW. Typically, the second quarter is the period with the lowest smartphone shipments from overseas strategic customers and a downtime for the second half, but thanks to the strong performance of LG Innotek's substrate materials division, the impact of the off-season in the second quarter is minimized. In the second half, operating profit is expected to increase significantly due to new model launches by customers, sales growth of 48M high-resolution products, and improvements in the automotive components division. Accordingly, LG Innotek's operating profit for this year is expected to increase by 19.5% to 1.5112 trillion KRW.

The momentum of the optical solutions segment is expected to continue. This is due to increased smartphone shipments from overseas strategic customers, a higher proportion of the Pro lineup, concurrent sales of front and rear 3D sensing modules, and upgrades in the specifications of optical components. In the second half of this year, the 48M pixel camera is expected to be adopted in the rear camera of the Pro lineup. Additionally, increasing the proportion of in-house components is expected to improve profitability.

Kwon Seong-ryul, a researcher at DB Financial Investment, stated, "There were concerns that LG Innotek's stock price showed rapid fluctuations compared to the market, other IT sectors, and stock price volatility-triggering issues, but after a correction of more than 10%, much of the sharpness in the stock price has been alleviated," adding, "Valuation indicators have also returned to comfortable levels, so an investment strategy considering the peak season in the second half seems necessary."

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