In early trading on the 1st, LG Innotek is surging 16%. Buying is seen gathering on expectations that results will beat market forecasts even in the off-season, analysts in securities said.
As of 9:46 a.m. on the day in the Korea Exchange main board, LG Innotek is trading at 343,000 won, up 49,500 won (16.87%) from the previous session.
Analysts in securities said LG Innotek's first-quarter results this year are expected to exceed the consensus (market average estimate).
Park Hyeong-woo of SK Securities said, "LG Innotek's first-quarter operating profit this year is forecast at 240.2 billion won, up 92% from a year earlier, beating the 176.2 billion won consensus," adding, "We expect the market bar for first-quarter operating profit to keep trending higher."
This is interpreted as stemming from expectations that profitability will improve in key business units such as LG Innotek's optical solutions (camera modules) and package solutions.
Cho Hyeon-ji of DB Securities said, "Optical solutions are expected to show solid profitability as volumes increase in proportion to strong client sales and high utilization rates continue."
The analysis is that strong iPhone sales at Apple, to which LG Innotek supplies camera modules, and the resulting increase in supply volumes are positive for earnings.
The outlook is also positive for the semiconductor substrate business unit. In the radio frequency system-in-package (RF-SiP) unit, market share is on the rise, and in the memory semiconductor package substrate business unit entered late last year, it secured a domestic integrated device manufacturer (IDM) as a client.
Lee Ju-hyeong of Eugene Investment & Securities said, "Thanks to technological leadership in copper post (Cu-Post) and broader adoption of in-house solutions by North American clients, RF-SiP substrate share is trending upward," adding, "The memory semiconductor package substrate business is also on track; it has secured one IDM as a client and is expected to add another IDM client in the near term."