[Click eStock] "LG Innotek, Profitability Boosted by iPhone 15 Effect"

[Asia Economy Reporter Kwon Jae-hee] Daishin Securities maintained a 'Buy' rating on LG Innotek on the 9th, while lowering the target price by 5% from the previous level to 380,000 KRW.

LG Innotek's operating profit for the first quarter of this year is expected to be 113.5 billion KRW, and sales are forecasted at 4.56 trillion KRW, falling short of consensus. This is due to the slowdown in Apple iPhone 14 sales, increased fixed cost burdens, and decreased sales of semiconductor substrates, which are expected to cause the overall operating profit margin to fall below previous estimates.

However, operating profit is expected to increase significantly in the second half of this year. Operating profit is projected to reach 966.4 billion KRW, a 916% increase compared to the first half. This is due to anticipated sales growth for LG Innotek driven by specification changes and increased volume of the Apple iPhone 15. This is also expected to lead to improved profitability.

Park Kang-ho, a researcher at Daishin Securities, said, "Operating profit for the third and fourth quarters of 2023 is estimated to increase year-on-year due to specification changes and sales growth of the Apple iPhone 15," adding, "We will maintain a strategy to increase weighting from a mid- to long-term perspective focused on performance improvement in the second half."