DAISHIN SECURITIES projected that consumer and components corporation LG Innotek would report surprisingly good results for the first quarter. They raised the target stock price from 250,000 won to 260,000 won and suggested a buy recommendation. On the 5th, LG Innotek's closing price was 162,000 won.
On the 6th, Park Kang-ho, a Research Institute at DAISHIN SECURITIES, noted, "LG Innotek is expected to record an operating profit of 131.8 billion won in the first quarter of this year," adding, "This figure would surpass the previous estimate (86 billion won) and consensus (94.5 billion won) by 53.3% and 39.5%, respectively."
DAISHIN SECURITIES projected LG Innotek's annual operating profit to be 740.5 billion won, which is an increase of 8.1% from previous estimates. Earnings per share (EPS) have been raised by 9.5%. Park explained that regarding the increase in operating profit, "The rise in average selling price (ASP) and mix effect, rather than the increase in iPhone sales by Apple, serve as critical investment criteria for the expansion of operating profit margins."
He said, "LG Innotek has a high supply ratio (to Apple) centered on high-value cameras," adding, "At the same time, by supplying the front and rear cameras of the iPhone 16e, released in February this year, exclusively, the burden of fixed costs has been alleviated, leading to an expansion of profitability." Additionally, further profit improvements from the rise in the exchange rate of the won to the dollar are expected.
Park identified the key factors to watch this year as ▲ visibility of new businesses ▲ diversification efforts into automotive, autonomous driving, and humanoid areas during the process of reducing Apple's share ▲ the success of the upcoming iPhone 17 (scheduled for release in September).
He added, "The increase in sales of the next-generation growth product FC BGA (flip chip ball grid array) and the high likelihood of supplying high-value products to Intel have increased," noting, "This year, I expect FC BGA sales to shift from chipset-centric to central processing unit (CPU) and artificial intelligence (AI) semiconductors in the second half of the year."