[Click eStock] "LG Innotek Expected to Expand Role in Robotics... Target Price Raised"

On March 19, DS Investment & Securities raised its target price for LG Innotek to 390,000 won and maintained its "Buy" investment rating.

Daehyung Cho, a researcher at DS Investment & Securities, stated, "Substrate businesses such as RF-SiP and FC-CSP, which have consistently stood out, are essentially operating at full capacity. We can also expect increased profit contribution from capacity expansion and the turnaround in FC-BGA. Therefore, both performance and momentum have clearly surpassed last year's bottom." He added, "Given that the company has entered a profit-increasing phase, the current valuation is significantly undervalued."

For the first quarter of this year, LG Innotek is expected to post sales of 5.361 trillion won (up 7.6% year-on-year) and operating profit of 192.2 billion won (up 53.6% year-on-year). Both DS Investment & Securities' estimate of 198.5 billion won and the market consensus of 169 billion won are expected to be exceeded. Cho explained, "Although the specification of all models has been upgraded, the company maintained prices, and this policy, combined with the physical replacement cycle, is leading to long-tail demand." He continued, "As a result, profitability in the seasonally weaker second quarter is also expected to improve compared to last year, and with the launch of foldable and new models in the second half, demand is likely to remain solid, alleviating concerns."

The company's presence in the humanoid robot sector is also said to be growing. Cho noted, "Following Boston Dynamics, LG Innotek is reportedly about to supply camera modules for robots to North American clients as well. From 2027, when mass production volumes are expected to increase significantly, we anticipate mix improvement effects as the proportion of this business grows."

Cho further predicted that each humanoid robot will be equipped with seven camera modules, adding, "Because the modules for humanoids are expected to be centered on higher-priced units, the expansion of sales to humanoid applications should drive up the average selling price (ASP)." He also projected that if supply expands to include sensing-related parts such as sensors and LiDAR in the future, LG Innotek's role in the robotics segment will expand even further.

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