[Click eStock] "LG Innotek, Expected Record 4Q Performance... Considered a Buying Opportunity at Low Prices"

On the 7th, KB Securities maintained a buy rating and a target price of 390,000 KRW for LG Innotek, stating that the supply chain disruptions related to new smartphone parts for strategic customers in the second half of this year can be resolved in the short term, and record-high performance is expected in the fourth quarter.

In particular, the internalization of LG Innotek's folded zoom camera modules and actuator parts to be installed in new smartphones in the second half is expected to improve both pricing and shipment volume simultaneously, with the operating profit in the fourth quarter projected to account for 60% of the annual operating profit this year.

LG Innotek's operating profit in the second half is estimated to increase by 37% year-on-year to 843.1 billion KRW, with the fourth quarter expected to achieve the highest quarterly performance. Dongwon Kim, a researcher at KB Securities, explained, "The operating profit in the fourth quarter is estimated at 600.2 billion KRW, a 253% increase compared to the previous year, due to increased shipments of folded zoom camera modules and cost structure improvements from the internalization of actuators, which have recently shown clear production yield improvements." He added, "This is expected to be the highest performance record in one year since the third quarter of 2022."

He also stated, "The production yield of new smartphone parts currently exceeds 90% as of early August, and mass production is expected to begin in earnest after mid-August." Furthermore, he said, "With improvements in production yield of new parts, both pricing and volume are expected to increase simultaneously, and considering the record-high performance expected in the fourth quarter, this is judged to be a buying opportunity at a low price."

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