MERITZ Securities evaluated on the 23rd that LG Innotek is expected to continue its negative growth this year, although it has already been reflected in the stock price. It anticipated that the upcoming Apple Worldwide Developers Conference (WWDC) in June could be a turning point.
Yang Seung-soo, a researcher at MERITZ Securities, predicted that LG Innotek would record a consolidated revenue of 19.8 trillion won and an operating profit of 607.8 billion won this year. Compared to the provisional results from last year, revenue is expected to be 6.4% and operating profit 13.9% lower.
Yang noted, "Given that LG Innotek has maintained an unusually high market share within its client companies, it was inevitable to face the challenge of declining market share due to intensifying competition. Therefore, it appears likely that poor performance will continue this year."
However, Yang viewed that the stock price of LG Innotek has already reflected most of the expected poor performance this year. He suggested that it is necessary to consider when the stock price might rebound rather than just worrying about poor performance.
Yang remarked, "Looking back at last year, the stock price of LG Innotek ultimately recorded an upward trend around the time expectations for a rebound in set demand were reflected." He further stated, "I believe that the WWDC, which will be held in June this year, is likely to be a key turning point for a rebound in stock price."
He added, "At this WWDC, Apple's strategy related to artificial intelligence (AI) agents is expected to be revealed," noting that expectations for replacement demand based on Apple Intelligence could rise once again.
Yang emphasized the need to prepare for the possibility of a reversal in LG Innotek's stock price around the WWDC and suggested a 'buy' investment recommendation, maintaining the target price at 220,000 won.