Korea Investment & Securities said on the 11th that LG Innotek's fourth-quarter camera module sales will grow as iPhone 17 sales increase. It kept its "Buy" investment rating and raised its target price to 344,000 won from 268,000 won. LG Innotek's closing price in the previous trading day was 289,000 won.
Park Sang-hyun, an analyst at Korea Investment & Securities, said, "Even though the specifications and design of the iPhone 17 have few significant differences from the previous model, cumulative sales in September–October rose 18% from the same period for the previous model thanks to expanded marketing in China's channels and the arrival of the replacement cycle (52 months)," adding, "As a result, LG Innotek's expansion in camera module shipments will carry into fourth-quarter results."
Park expects LG Innotek's consolidated fourth-quarter revenue this year at 7.8463 trillion won and operating profit at 399.3 billion won. Those would be up 46.1% and 96% from a year earlier, respectively. In particular, he forecasts the optical solutions institutional sector to post revenue of 6.8940 trillion won and operating profit of 330.9 billion won, up 53.8% and 100.8% from a year earlier.
Demand for package substrates is also expected to increase. Park said, "While demand for display-related products such as chip on film (CoF) and photomasks remains stable, demand for package substrates including radio frequency system-in-package (RF-SiP) and flip-chip chip-scale package (FC-CSP) will be solid due to the increase in initial iPhone 17 volumes."
He added, "While its status as a key package substrate supplier to a North American client remains intact, applications are diversifying into AI memory such as PC central processing units (CPU) and next-generation graphics memory (GDDR7)," and analyzed, "The contribution of the substrate materials business to operating profit will expand from 9.6% in 2024 to 18.4% in 2025 and 28.4% in 2026."
For the substrate materials institutional sector, Park expects fourth-quarter revenue this year of 495.0 billion won and operating profit of 57.9 billion won. Those would be up 13.1% and 110% from a year earlier, respectively.