Hana Securities said on the 30th that LG Innotek has secured a medium- to long-term growth engine by increasing the share of non-mobile revenue as a North American customer's smartphone sales show strong momentum. It maintained a "Buy" rating and raised its target price to 340,000 won from 310,000 won.
Hana Securities estimated that LG Innotek will post revenue of 7.5071 trillion won and operating profit of 398.8 billion won in the fourth quarter (October–December) this year. That would be up 13% and 61%, respectively, from a year earlier.
Kim Min-gyeong, a research analyst at Hana Securities, said, "We raised operating profit more than 30% from our previous estimate, factoring in the exchange rate effect and brisk smartphone sales by a key North American customer," and analyzed, "In the optics institutional sector, sales of new models by the North American smartphone customer in September–October rose 20% from a year earlier, and the share of (iPhone 17) Pro and Pro Max is holding at a level similar to the previous generation."
Kim judged that a conservative pricing policy by set manufacturers is spurring replacement demand, extending strong sales in key regions such as China and the United States. In the substrate institutional sector, inventory adjustments for display substrates have continued since the first half, but package substrates are maintaining an improving earnings trend on the back of higher share within customers.
Kim said, "Next year we focus on earnings growth in the substrate and automotive electronics institutional sector," adding, "In the substrate materials institutional sector, supply of memory package substrates will begin next year and earnings improvement will accelerate with expanded supply of FCBGA (flip-chip ball grid array) for PC chipsets," and said, "The automotive electronics components institutional sector is also expected to see new businesses take off in earnest, leading to top-line expansion and profitability improvement."
The firm then presented next year's forecast revenue at 22.1956 trillion won and operating profit at 843 billion won. Those figures would be up 2% and 14%, respectively, from this year.