[Click eStock] "LG Innotek, Approaching the Era of 1 Trillion Operating Profit"

[Asia Economy Reporter Ji-hwan Park] Kiwoom Securities maintained a 'Buy' rating and a target price of 260,000 KRW for LG Innotek on the 14th, stating that the company is heading toward an era of 1 trillion KRW in operating profit.

Ji-san Kim, a researcher at Kiwoom Securities, emphasized, "Although it is an off-season, optical solutions are expected to lead better-than-expected performance in the second quarter, as strategic customers are performing well in the premium phone market, and the iPhone 12 Pro series holds a high proportion." Operating profit for the second quarter this year is expected to reach 131.9 billion KRW, a 142% increase compared to the previous year, significantly exceeding the market expectation of 109.1 billion KRW. On an annual basis, operating profit is expected to increase by 204.5% year-on-year to 1.0165 trillion KRW.

In particular, the semiconductor substrate centered on 5G communication SiP is also noted for its strong performance. In the second half of the year, the performance momentum is expected to be highlighted by the effect of new models from strategic customers, and the profit contribution from automotive components and the advanced progress of autonomous driving solutions are expected to serve as grounds for corporate value re-evaluation.

Researcher Ji-san Kim stated, "The price-to-earnings ratio (PER) based on this year's expected performance is only 6.9 times, and the turnaround of automotive components and the leading progress of autonomous driving solutions will serve as grounds for re-evaluation." He added, "In the mid to long term, in the process of high growth in the AR glasses market in the metaverse era, camera and 3D sensing modules are expected to gain new opportunities."