KB Securities Report
[Asia Economy Reporter Lee Myunghwan] As the first sales of Apple's new smartphone, the iPhone 14 series, show strong performance, securities firms have forecasted that domestic companies supplying parts for the iPhone will see improved earnings in the second half of the year.
On the 18th, KB Securities analyzed, "Despite concerns about an economic recession and expanding inflation, the concentration of consumer purchases on the highest-priced iPhone 14 model, the Pro Max, is a positive sign." The iPhone 14 series consists of the basic models 'iPhone 14' and 'iPhone 14 Plus', and the premium models 'iPhone 14 Pro' and 'iPhone 14 Pro Max'.
According to major foreign media reports, considering the pre-order demand for the iPhone 14 series, the premium models are performing better compared to the previous iPhone 13 series. It is said that even if ordered now, delivery will only be possible by the end of October.
The reason for the better-than-expected pre-sales of the high-priced iPhone 14 Pro series is attributed to the fact that the global economic recession and inflation do not significantly affect the demand for the high-end iPhone 14 models. It is also analyzed that there are virtually no competing products against the iPhone 14 in the global high-end smartphone market.
KB Securities' analysis points out that the strong sales of the premium iPhone 14 Pro series are directly linked to improved performance of parts suppliers. In particular, the concentration of consumer purchases on the highest-priced Pro Max model is seen as favorable.
KB Securities expects domestic companies supplying key parts for the iPhone 14 Pro series to achieve record-high earnings. The supply shares of domestic parts companies are estimated as Samsung Display 85% (OLED), LG Innotek 75% (camera), and BH 65% (FPCB). The proportion of iPhone sales in the total sales of these companies this year is expected to be 50% for Samsung Display, 80% for LG Innotek, and 70% for BH. The combined operating profit of these three parts companies in the second half of the year is estimated at 5.3 trillion KRW.
Researcher Kim Dongwon of KB Securities stated, "Korean parts companies such as Samsung Display, LG Innotek, and BH have the highest supply share of parts for the iPhone 14 Pro series," adding, "The strong sales of the iPhone 14 Pro series are expected to directly lead to improved earnings for these parts suppliers." KB Securities recommended Samsung Electronics, the parent company of Samsung Display, LG Innotek, and BH as the top preferred stocks for iPhone 14 parts.
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