by Cha Minyoung
Published 08 Mar.2024 08:19(KST)
Daishin Securities maintained its target price and 'Buy' investment rating for LG Innotek on the 8th, stating that although the stock experienced a decline alongside sluggish iPhone sales in China recently, the possibility of additional profit downward revisions in the first quarter is low.
Researcher Park Kang-ho said, "LG Innotek's stock price also showed weakness due to the recent decline in Apple's stock price," and added, "In January this year, iPhone sales in China decreased by 25.5% compared to the same month last year."
Park Kang-ho explained, "The sluggish iPhone sales in China in January were already anticipated as the Chinese government's restrictions began in the fourth quarter of last year," and said, "The company presented guidance reflecting the off-season in the first quarter of this year and a proactive reduction in camera module supply for iPhones."
Daishin Securities forecasted that LG Innotek's operating profit for the first quarter of 2024 will reach 150.2 billion KRW, a 3.4% increase compared to the same period last year. This exceeds the consensus estimate of 107.5 billion KRW.
He evaluated, "While the supply of camera modules and components has decreased, Apple iPhone sales are expected to continue declining," and added, "There is little possibility of further profit downward revisions due to sluggish sales in China."
He also stated, "The total iPhone sales in January are estimated to be 20.2 million units, a 2.1% decrease compared to the same month last year," and said, "The sluggish sales in China will be offset by sales in the US and Europe. The impact on LG Innotek is analyzed to be limited."
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