[Stock in Focus] LG Innotek Surges Over 6% on Strong Quarterly Results and Fully Booked Substrate Orders

Shares of LG Innotek are on the rise, fueled by expectations of a positive earnings surprise in the first quarter and a strong run of fully booked substrate orders.

As of 9:52 a.m. on March 25, LG Innotek was trading at 311,500 won, up 19,500 won (6.68%) from the previous trading day.

On the same day, Meritz Securities maintained its buy rating on LG Innotek and raised its target price from 340,000 won to 360,000 won. The upward revision reflects expectations for first-quarter results that will surpass market forecasts, as well as a significant increase in profit contribution from the semiconductor substrate business.

Yang Seungsoo, a researcher at Meritz Securities, stated, "Driven by solid iPhone sales and favorable exchange rate effects, the profitability of the optical solutions division is expected to exceed market expectations. The semiconductor substrate segment is also projected to maintain peak utilization levels in the first quarter, typically a slow season, thanks to increased iPhone shipment volumes and growing memory sales."

He particularly highlighted the growth of the substrate business. Yang predicted, "LG Innotek's semiconductor substrate utilization rate will approach virtually 100% within this year. There is a high likelihood that additional expansion decisions will become visible within the first half, and in the mid-to-long term, the profit contribution of the substrate business division will increase."

He added, "Given that the current valuation burden is limited, the expanding profit contribution of the substrate business and the increasing revenue share from major North American humanoid companies will serve as new catalysts for a revaluation of the stock."

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