[Click eStock] "LG Innotek, Q2 Surprise Sparks Hopes for H2... Target Price 'Up'"

Shinhan Investment Corp. analyzed on the 25th that LG Innotek recorded a second-quarter earnings surprise and expects performance improvement in the second half of the year. The investment opinion was maintained as 'Buy,' and the target stock price was raised to 360,000 KRW.

LG Innotek posted sales of 4.6 trillion KRW and an operating profit of 151.7 billion KRW in the second quarter. This represents increases of 17% and 726%, respectively, compared to the same period last year. Kangho Oh, a researcher at Shinhan Investment Corp., explained, "The operating profit surpassed the consensus of 104.9 billion KRW, marking a surprise performance," and added, "The profit improvement is estimated to be due to solid demand, sales of high value-added products, and exchange rate effects."

He stated, "Demand for high-performance cameras from client companies drove growth," and "Sales of semiconductor substrates increased due to expanded front-end demand." He also added, "The order backlog for automotive components in the first half of the year stands at 12.5 trillion KRW."

He particularly advised that it is a timely moment to focus on growth potential in the second half following the strong earnings announcement. He emphasized, "Global smartphone shipments are expected to increase by 5% compared to last year, and the enhancement of artificial intelligence (AI) functions by client companies is positive for increased consumer replacement demand," adding, "Further upward revisions of estimates are also possible due to sales of high value-added products and demand recovery."

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