[Click e-Stock] "LG Innotek Hits Record Highs but Still Undervalued... Target Price Raised"

SK Securities has raised its target price for LG Innotek to 600,000 won, as the company continues its streak of hitting new record highs. The brokerage explained that the stock remains undervalued despite the substrate market entering a full-scale boom. This year, LG Innotek’s operating profit is expected to exceed the 1 trillion won mark for the first time in four years.

According to SK Securities on April 23, the newly suggested target price of 600,000 won represents an increase of more than 55% compared to the previous target of 385,000 won. Based on the previous day’s closing price, SK Securities sees an additional upside potential of around 20%. LG Innotek, which has been experiencing a sharp upward trend in its stock price this month, closed the previous day at 500,000 won, up 17.65% in regular trading.

Hyungwoo Park, a researcher at SK Securities, highlighted that the trend of increasing substrate prices is expanding across all product lines. Park explained, “The upward trend in supply prices that began with MLB (multi-layer board) and FCBGA (flip chip ball grid array for high-end semiconductors) has now spread to all substrate products. The focus on expanding FCBGA production capacity is leading to supply constraints for lower-end substrates such as SiP. As a result, the price increase for SiP substrates is also becoming evident due to expansion bottlenecks.”

This year, LG Innotek’s substrate sales and operating profit are estimated to reach 1.4 trillion won and 200 billion won, respectively. Researcher Park pointed out, “Domestic substrate companies with similar business sizes have market capitalizations ranging from 3 trillion to 5 trillion won, so the company’s valuation is significantly undervalued.” He added, “SiP substrates are also promising, following FCBGA. LG Innotek is the only company with large-scale MSAP substrate capacity and the ability to respond to expansion.” Park also emphasized, “Pay attention to the largest client’s production expansion plan for 2027. Operating profit is expected to grow year-over-year for six consecutive quarters.”

Accordingly, LG Innotek’s operating profit this year is projected to reach 1.1 trillion won, marking a recovery to the 1 trillion won level for the first time in four years. Park noted, “2027 is a key year to watch,” and also mentioned the need to raise current forecasts. He explained, “The North American client is considering additional production increases in 2027, following plans to boost smartphone production this year. LG Innotek is poised to benefit, especially as Chinese camera competitors are facing profitability pressures.”

Previously, Meritz Securities also raised its target price for LG Innotek by 19.4% to 430,000 won. This adjustment reflects increases of 6.6% and 4.3% in estimated operating profit for 2026 and 2027, respectively. Seungsu Yang, a researcher at Meritz Securities, commented, “Despite the recent sharp rebound in the short-term share price, LG Innotek remains undervalued compared to global printed circuit board (PCB) peers and its historical valuation.”

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