[Click eStock] "LG Innotek Focused on 'Pro'... Current Stock Price Attractive"

[Asia Economy Reporter Myunghwan Lee] DB Financial Investment announced on the 6th that it maintains a buy rating and a target price of 450,000 KRW for LG Innotek. It also assessed that the current stock price, which has fallen due to recent demand concerns from major clients, is at an attractive level.

Regarding the recent sluggish sales of Apple's iPhone 14 series, DB Financial Investment emphasized the need to focus on the market share of the Pro series rather than the overall sales volume. LG Innotek supplies components such as camera modules for the iPhone 14 series. The iPhone 14 series consists of two standard models and two high-end Pro models.

DB Financial Investment's analysis indicates that the second half sales volume of the iPhone 14 series remains largely unchanged from the initial estimate of 90 million units, while the projected share of the Pro models is gradually rising from the mid-50% range to 60%. It also noted that LG Innotek appears to have a higher market share than competitors in front cameras, which are included in all four models.

Accordingly, DB Financial Investment explained that LG Innotek's operating profit forecast for the fourth quarter of this year is expected to rise. The current operating profit forecasts are in the low 400 billion KRW range for the third quarter and mid-500 billion KRW range for the fourth quarter. While the third quarter forecast seems reasonable, DB Financial Investment pointed out that the fourth quarter forecast should increase considering the rising proportion of Pro models. Although the situation for display-related components is unfavorable, the higher exchange rate sufficiently offsets this. The automotive components division is also analyzed to be reducing its deficit as sales increase.

Recently, LG Innotek's stock price has dropped about 20% over the past two weeks due to controversy over Apple's new product sales outlook. However, DB Financial Investment views this as an oversold condition. Researcher Seongryul Kwon of DB Financial Investment advised, "The actual fundamentals are not bad at all, and there is upside potential for fourth-quarter earnings. If one objectively understands which models LG Innotek focuses on and the extent of LG Innotek's influence on those models, the stock price below 300,000 KRW, which has returned after 10 months, is very attractive."

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