Daishin Securities projected on the 26th that LG Innotek is entering a phase where its profit momentum will weaken due to reduced iPhone 16 production until the first half of next year. Thus, it maintained its investment opinion at 'buy' but lowered the target price to 250,000 won, a 7.4% decrease. In the previous transaction, LG Innotek closed at 164,600 won.
According to Daishin Securities, LG Innotek's operating profit for the fourth quarter of this year is estimated to be 285.5 billion won, a 41% decline compared to the same period last year. This is below the previous estimate of 332 billion won and the market consensus of 336.5 billion won. Revenue is forecasted to decrease 15.7% year-over-year to 6.37 trillion won.
Park Kang-ho, a researcher at Daishin Securities, noted, 'The operating profit margin is expected to fall to 4.5%, a decline of 0.7 percentage points from previous forecasts,' adding that 'a slowdown in revenue and profitability is anticipated, particularly centered around semiconductor substrates.'
Furthermore, Park said, 'Due to weak smartphone demand and inventory adjustments by memory companies, sales of flip-chip chip scale package (FC CSP) and system in package (SIP) are projected to be lower than previously expected,' indicating that 'revenue stagnation will continue due to weak demand in the automotive and display markets for automotive parts.'
Additionally, Park stated, 'The initial sales atmosphere for the iPhone 16 is weak, but further production adjustments are minimal,' and projected that 'LG Innotek will enter a phase where its profit momentum will weaken due to reduced iPhone 16 production until the first half of 2025.'