[Click eStock] "LG Innotek, Valuation Appeal Rises with iPhone Effect"

[Asia Economy Reporter Kwon Jae-hee] Kiwoom Securities maintained its 'Buy' rating and target price of 440,000 KRW for LG Innotek on the 1st.

LG Innotek's third-quarter operating profit is estimated at 413.7 billion KRW, representing a 23% increase year-on-year, which is expected to meet market expectations. If favorable exchange rate conditions continue, there is a high possibility that the estimate will be exceeded.

Ji-san Kim, a researcher at Kiwoom Securities, stated, "Despite the smartphone market downturn triggered by inflation, demand for premium smartphones led by the iPhone remains strong," adding, "The iPhone 14 series was released one week earlier than its predecessor, and shipments are expected to exceed 90 million units by the end of the year, surpassing the previous model."

Researcher Kim also added, "With the performance improvement of the Pro series, the strong sales trend of the Pro series is expected to continue."

Regarding changes in LG Innotek's optical solutions environment, the main camera of the Pro series has been upgraded to 48 million pixels, increasing the supply unit price, and an additional front camera will be supplied. Accordingly, both the selling price and shipment volume are expected to rise, sustaining the product mix improvement effect centered on the Pro series.

Within substrate materials, semiconductor substrates are supported by solid demand for North American smartphone customers' radio frequency package systems (RF-SIP) and antenna-in-package (AIP), and are expected to continue an upward trend with record-high profitability. However, display components are likely to see a sales decline due to TV demand downturn and inventory adjustments.

Researcher Kim analyzed, "Automotive components are recovering shipments as vehicle semiconductor supply issues ease, approaching the break-even point faster than expected," and added, "The stock price has undergone sufficient adjustment period and remains at a price-to-earnings ratio (PER) of 7.1, increasing its valuation attractiveness."

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