[Featured Stock] LG Innotek Rises 7% on Expectations of Increased iPhone Production

[Asia Economy Reporter Minji Lee] LG Innotek is showing a rise of over 7% thanks to the increased production volume of the iPhone.

At 10:34 AM on the 15th, LG Innotek was trading at 240,000 KRW, up 7.38% from the previous trading day. The stock price rose to as high as 242,000 KRW during the session. This positive movement is analyzed to reflect the news that Apple, its client, has raised the initial production volume of the iPhone 13, scheduled for release in September this year, by 20% to 90 million units.

LG Innotek supplies camera modules for the iPhone. The client’s smartphone shipment volume and stock price are inevitably linked. Dongwon Kim, a researcher at KB Securities, said, “Apple’s production increase is based on expectations of consumer sentiment recovery following COVID-19 vaccinations and confidence in expanding sales in North America and Europe,” adding, “A revaluation of stocks such as LG Innotek, LG Display, and Samsung Electronics, which lead the supply of core components for Apple and future growth, is expected.”

Additionally, the positive reflection of securities firms’ outlooks calling for a revaluation of the automotive parts business is also apparent. Hyungwoo Park, a researcher at Shinhan Investment Corp., said, “LG Innotek’s automotive sales are the largest among domestic IT parts companies,” and forecasted, “Operating profit from the automotive division is expected to be 24.8 billion KRW this year, 60.1 billion KRW in 2022, and 100.8 billion KRW in 2023, with the current cumulative order backlog for automotive parts exceeding 10 trillion KRW.”