[Click e-Stock] "LG Innotek, the Biggest Beneficiary of iPhone Sales Increase"

[Asia Economy Reporter Kwon Jae-hee] KB Securities maintained a buy rating on LG Innotek on the 6th, setting a target price of 540,000 KRW. This is due to the expected 10-20% increase in iPhone 14 shipments in the second half of the year compared to its predecessor, as well as the iPhone 14 demand in China significantly exceeding market expectations.

KB Securities forecasted that the iPhone 14 will dominate the global smartphone market in the second half of the year. While major Android manufacturers such as Samsung and Chinese companies (Oppo, Vivo, Xiaomi) have lowered their smartphone shipment forecasts by 9-14% from the beginning of the year and are focusing on reducing inventory in the second half, Apple is estimated to have set shipment plans for the iPhone 14, launching in the second half, at more than 10% higher than the record sales of the iPhone 13. This positive outlook for iPhone 14 sales is understood to be because the economic downturn in China and globally does not significantly affect iPhone purchase demand, and consumers’ smartphone selection criteria are shifting towards brand and camera features.

Accordingly, LG Innotek’s optical solutions sales this year are projected to increase by 16% year-on-year to 13.3 trillion KRW, but given that the iPhone 14 demand in China greatly exceeds expectations, it is also highly likely to surpass 14 trillion KRW (a 22% increase year-on-year).

Kang Dong-won, a researcher at KB Securities, analyzed, "The iPhone holds a 62% share of the premium smartphone market worldwide, and demand for high-end iPhones is not significantly affected by the economic downturn in China or global inflation. In particular, LG Innotek, which supplies camera modules mainly for high-end iPhones, is expected to benefit the most from the increase in iPhone sales, with an estimated 79% of its sales coming from iPhones."

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