[Click eStock] "LG Innotek, Short-Term Momentum Lacking... Target Price Down"

[Asia Economy Reporter Son Sunhee] Hana Securities lowered the target price of LG Innotek from 430,000 KRW to 380,000 KRW on the 26th. This was due to last year's poor performance and a lack of short-term performance improvement momentum.

LG Innotek's sales in the fourth quarter of last year increased by 14% year-on-year to 6.5477 trillion KRW, but operating profit during the same period fell by 61% to 170 billion KRW. The optical solutions segment underperformed due to production disruptions at North American customers, and package substrate sales in the substrate materials segment also fell short of expectations. Additionally, one-time costs such as year-end bonuses were larger than anticipated, causing operating profit to fall significantly below market expectations.

Hana Securities estimated LG Innotek's sales for the first quarter of this year to be 5.0673 trillion KRW, with an operating profit of 194.4 billion KRW. The optical solutions segment is expected to achieve a record quarterly sales of 4.2178 trillion KRW as some of the production disruptions from the previous quarter are deferred.

However, the decline in exchange rates is expected to have a negative impact.

Kim Rokho, a researcher at Hana Securities, said, "Although the lack of short-term momentum is regrettable, we believe there will be opportunities to increase holdings during the period when expectations for the second half of the year are formed."

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