[Click eStock] "LG Innotek, 150 Billion KRW Operating Profit Improvement Expected... Sufficient Upside Potential"

[Asia Economy Reporter Park Jihwan] KB Securities forecasted on the 29th that LG Innotek is expected to improve operating profit by more than 150 billion KRW due to adjustments in loss-making business sectors, focusing on automotive LED, and synergy effects with ZKW.

Dongwon Kim, a researcher at KB Securities, stated, "LG Innotek announced the suspension of substrate (HDI, PCB) business excluding 5G semiconductor substrates last November, and the LED sector is also expected to undergo gradual business reduction through structural efficiency improvements this year," adding, "If the suspension of both substrate and LED businesses materializes simultaneously, an operating profit improvement of approximately 150 billion KRW is estimated due to adjustments in loss-making business units."

Particularly, focusing on automotive LED and creating synergy effects through collaboration with ZKW in the future is a noteworthy aspect. Researcher Kim evaluated, "LG Group's automotive parts business is expected to achieve efficient specialization of next-generation automotive technologies such as autonomous driving through selective focus by sector."

The future stock price trend is also positive. Researcher Kim said, "Despite the recent stock price increase, there is sufficient potential for further stock price growth of LG Innotek," explaining, "Over the past 10 years, when major customers' new camera functions changed, LG Innotek's operating profit increased by an average of 150 billion KRW annually, and a real profit increase effect of 150 billion KRW is expected through structural efficiency improvements in loss-making businesses."