Looking at December's Upgraded Stock Price Targets in the Securities Sector... Strong Performance and New Business Themes Lead Gains

LG Innotek, Operating Profit Expected to Reach 1 Trillion KRW
Potential 30% Increase to 370,000 KRW Level

[Asia Economy Reporter Park Ji-hwan] Securities firms are raising target prices for stocks that hold new business themes leading the recent stock market, such as metaverse and non-fungible tokens (NFTs), along with strong earnings.

According to financial information provider FnGuide on the 8th, a total of 21 securities firm reports have raised target prices so far this month. Among them, LG Innotek had the most upward target price revisions, with five reports. The average target price for LG Innotek suggested by securities firms is around 370,000 KRW, indicating about a 30% upside potential compared to the current price level in the 290,000 KRW range. This is a result of the strong earnings streak and the company being highlighted as a representative beneficiary of metaverse and electric vehicles (Apple Car), raising the expectations of securities firms. Above all, the earnings stability is highly regarded.

LG Innotek's annual operating profit this year is expected to reach 1.2772 trillion KRW, an 87.6% increase compared to the previous year. Next year is also estimated to achieve over 1 trillion KRW in operating profit for the second consecutive year, at 1.3122 trillion KRW. Lee Kyu-ha, a researcher at NH Investment & Securities, said, "Starting with extended reality (XR) devices next year, the momentum for stock price increases will continue with folded camera deployment in 2023, foldable smartphones in 2024, and autonomous vehicles and augmented reality (AR) glasses in 2025," adding, "Considering the historically low valuation levels despite the recent stock price rise, it is still judged to be an attractive price range."

JYP Entertainment also saw its target price raised due to benefits from the resumption of concerts and expectations for new businesses such as metaverse and NFTs. NH Investment & Securities raised JYP Entertainment's target price from 46,000 KRW to 59,000 KRW, considering continuous earnings improvement with operating profits of 59.2 billion KRW this year, 68.7 billion KRW next year, and 82.2 billion KRW in 2023, as well as growth potential through new business developments like metaverse and NFTs. NCSoft is also analyzed to have next-generation growth drivers in NFT and P2E (Play to Earn), scheduled to be introduced next year, along with revenue growth from the hit new game Lineage W.

In the case of Hyosung Advanced Materials, a target price of 1,000,000 KRW, the benchmark for becoming a "Hwangjeju" (emperor stock), was presented. On the 7th, Kiwoom Securities raised the target price by 5.3% from 950,000 KRW to 1,000,000 KRW, stating that while the performance improvement in the core business of tire cords (tire reinforcement materials) continues, the sales expansion from increased carbon fiber production capacity seems not to have been fully reflected in the stock price.