[Click eStock] "LG Innotek, Upcoming Peak Season... Stock Price Upward Momentum Valid"

Ebest Investment & Securities maintained its investment opinion of 'Buy' and target price of 380,000 KRW for LG Innotek on the 22nd.

LG Innotek's performance in the second quarter of this year is expected to exceed the previous estimate of -38 billion KRW, with sales of 3.7 trillion KRW and operating profit of 18 billion KRW. The revision in earnings estimates is due to the appreciation of the exchange rate and cost improvement effects, which are expected to reduce the operating loss in the optical solutions division compared to previous expectations. The substrate materials division is estimated to rebound in profitability compared to the first quarter due to the start of supply to North American customers and improved performance in the display division. In the automotive sector, losses are expected due to semiconductor issues in the automotive industry, along with decreased shipments caused by model changes and mix shifts.

The 2023 performance is estimated at sales of 21.3 trillion KRW and operating profit of 1.2 trillion KRW. While the 2023 performance is expected to show a seasonal pattern of lower results in the first half and higher in the second half, the peak season is approaching. North American customers are understood to apply 48M cameras to all iPhone 15 models and equip the top-tier model with a folded zoom camera. LG Innotek is expected to maintain its position as a key supplier of 48M camera modules due to competitors' passive investments and quality issues. Additionally, LG Innotek is set to be the sole supplier of folded zoom modules within the supply chain management (SCM), which is expected to bring significant benefits from the increase in average selling price (ASP). Although the internalization of actuators will initially increase fixed costs, it is expected to contribute to profitability improvement through future cost reduction effects.

Researcher Kim Kwang-soo of Ebest Investment & Securities analyzed, "Operating profit in the second quarter is expected to exceed market expectations," and added, "The future direction of the stock price depends on the success of the iPhone 15, and we maintain a buy opinion as the momentum for LG Innotek's stock price increase remains valid."

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