IBK Securities on the 10th said it expects it will be difficult for LX Semicon to recover earnings in the fourth quarter this year due to the impact of dual sourcing at a client and a delayed recovery in demand. It lowered its target price to 67,000 won from 78,000 won while maintaining a buy rating. The previous trading day's closing price of LX Semicon was 52,500 won.
In the third quarter this year, LX Semicon posted revenue of 394.4 billion won and operating profit of 14 billion won. Those figures fell 6.1% and 59.1%, respectively, from a year earlier. All products except mobile contracted year over year, and revenue from TV products fell 24% to 98.6 billion won. This appears to be due to high inventory levels in the channel and a decline in TV demand.
By contrast, mobile revenue grew 14% from a year earlier. The mobile segment showed growth despite continued market share competition within the client base, helped by strong sales of the iPhone 17 series.
IBK Securities projected that in the fourth quarter this year, LX Semicon's revenue will come in at 428 billion won, down 14.8% from a year earlier, and operating profit at 25.6 billion won, down 16.2%.
Kang Min-gu, an analyst at IBK Securities, said, "Taking into account the delay in set demand recovery and the impact of dual sourcing at the client, we lowered both our revenue and operating profit forecasts from before."
For TV display driver ICs (DDIC), where contraction deepened in the third quarter, a turnaround is unlikely even with global sports events scheduled for early next year, given a mid- to long-term decline in demand.
Kang added, "For mobile and information technology (IT) as well, it is difficult at this point to expect year-over-year growth because of the removal of the 'pull-in' effect in preparation for Trump-driven tariffs and competition over iPhone 17 series volumes with Chinese panel makers."
He went on, "For the new businesses under way—heat-dissipation substrates and microcontroller units (MCU)—it will also take considerable time before they contribute to earnings."