LG Innotek, Innox Advanced Materials, BH and Others Weaken
Global Smartphone Demand Slows, China's iPhone Ban Moves Also Negative
"If Sales Increase, Gradual Stock Price Recovery Expected," Forecasts
Apple unveiled the iPhone 15, but related component stocks showed weak performance, reflecting a lukewarm response. Concerns over supply delays and issues originating from China are having a greater impact than expectations for the new iPhone. However, experts predict that as iPhone 15 sales perform well, domestic related stocks will also show a gradual recovery.
According to the Korea Exchange on the 14th, LG Innotek closed at 240,500 KRW, down 2.04% from the previous day. The stock price, which was in the 270,000 KRW range at the end of last month, has declined to the 240,000 KRW range this month amid continued weakness. In addition, stocks categorized as Apple iPhone-related, such as Enox Advanced Materials, BH, and Deokwoo Electronics, closed down 3.47%, 2.73%, and 4.64%, respectively, showing mostly weak performance.
Apple unveiled the new iPhone 15 series on the 12th (local time). The iPhone 15 introduced a USB-C charging port, applied titanium to premium models, and kept prices unchanged. Yang Seung-su, a researcher at Meritz Securities, said, "The biggest feature of the iPhone 15 is the price freeze," adding, "Although Apple's stock price fell after the launch event due to the unexpected price freeze, from the perspective of the domestic value chain, the possibility of strong sales and the sales strategy focusing on higher-end models are maximized, which is positive."
There are also opinions that the price freeze could be a burden for component suppliers. Park Hyung-woo, a researcher at SK Securities, said, "While the price freeze of the iPhone 15 is expected to partially offset sales slowdown, it may act as a burden on the supply prices for component companies."
There are also evaluations that the product fell short of consumer expectations in terms of features and design. Oh Kang-ho, a researcher at Shinhan Investment Corp., explained, "Even in this unveiling, there were no changes in differentiated elements such as features or design that could elicit consumer enthusiasm," adding, "This is also why Apple's stock price showed weakness after the product launch."
Amid the ongoing global slowdown in smartphone demand, issues such as the iPhone ban in China are additional burdens. Recently, the Chinese government prohibited central government officials from using foreign brand devices like the iPhone for work purposes. Furthermore, Huawei's new product 'Mate 60 Pro,' released after three years, is expected to impact iPhone 15 sales due to patriotic consumer sentiment. Kim Dong-won, a researcher at KB Securities, analyzed, "Considering the economic pros and cons, China's iPhone ban is judged to have no practical benefit, so the possibility of a full-scale expansion is low," adding, "Even assuming the worst-case scenario where iPhone sales are completely banned in all regions of China, it accounts for only 3.3% to 9.4% of total sales for iPhone component suppliers, so concerns about the iPhone ban in China are excessive." He further added, "The possibility of a reversal in the deteriorated investment sentiment is sufficiently open."
The recovery of related component stocks depends on the sales performance of the iPhone 15. Researcher Yang said, "Except for 2020, when external variables due to COVID-19 strongly affected the market, Apple and domestic component stocks' prices have aligned with sales trends," adding, "Despite an unfavorable environment, the price freeze and high potential demand based on replacement demand suggest that iPhone 15 sales will meet market expectations." He continued, "Considering the iPhone 15 supply regions, the possibility of expanded iPhone bans in China, and Huawei's Mate 60 Pro launch, domestic Apple value chain stocks are positioned at historical valuation lows, but a gradual stock price recovery due to strong sales is expected."
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