[Exclusive] LG Innotek, Achieving 'Jeonjang' Success, to Double CES Booth Size Next Year

First Revenue Reversal Opportunity for New CEO Moon Hyuksoo of LG Innotek

LG Innotek will double the size of its open booth at 'CES 2024,' the world's largest consumer electronics and IT exhibition held in Las Vegas, USA, in January next year. The company plans to leverage this CES event to enhance its capabilities, as it has been showing visible progress in its automotive parts business, which had been under the radar due to losses. Since Apple iPhone camera modules account for 75% of the company's total sales, expanding its participation scale at CES is also expected to yield results in diversifying its customer base.

LG Innotek CES 2023 Open Exhibition

On the 24th, the electronics components and mobility industry expects LG Innotek to set up an open booth of about 90 pyeong (approximately 298 square meters) at CES 2024, held in Las Vegas from January 9 to 12 next year. This is about twice the size of the 50 pyeong booth they first established at CES 2023. LG Innotek judged that the results of significantly unveiling new products related to electric vehicles and autonomous driving automotive parts at CES for the first time in January this year led to clear growth in customers and orders. Until now, LG Innotek had participated in CES in a private exhibition format, inviting only customers to introduce products. This January was the first time they set up a booth open to the general public.

LG Innotek's automotive parts division (motors, sensors, vehicle communication, etc.) recorded sales of 1.1835 trillion KRW in the third quarter of this year, accounting for 9.1% of total sales. Although the share had not exceeded 7% until 2022, it increased this year. The automotive parts division, which had been operating at a loss until last year, succeeded in turning a profit for the first time this year.

Moon Hyuk-soo, LG Innotek's first young CEO born in 1970, who is growing the automotive business, now faces the opportunity to surpass LG Display in annual sales for the first time. This is also a notable achievement of Jung Chul-dong, the new CEO of LG Display, who served as LG Innotek's CEO for five years before stepping in as the 'relief pitcher' for LG Display.

New CEO of LG Innotek, Vice President Moon Hyuk-soo

LG Innotek has never recorded annual sales exceeding those of LG Display until now. However, with the explosive sales expected from the new Apple iPhone model in the fourth quarter of this year, the total sales for 2023, to be announced in March next year, are highly likely to surpass LG Display.

According to LG Innotek's quarterly report, cumulative sales from the first to third quarters amount to 13.0467 trillion KRW. LG Display's cumulative sales for the same period are 13.9349 trillion KRW, both in the 'trillion' KRW range. It is unusual for LG Innotek to have caught up so closely to LG Display's previously insurmountable sales. Until last year, the cumulative sales for the first to third quarters were 13.0417 trillion KRW for LG Innotek and 18.8502 trillion KRW for LG Display, a difference of over 5 trillion KRW.

In terms of profitability, LG Innotek has long been ahead. Even if LG Display manages to turn a profit in the fourth quarter this year, it will still remain in the red on an annual basis due to an operating loss of 2.6419 trillion KRW in the first to third quarters. Meanwhile, LG Innotek has already posted an operating profit of 347.1 billion KRW for the first to third quarters. Therefore, depending on how much LG Innotek can increase its sales in the remaining month of the fourth quarter, it could record higher annual sales and operating profit than LG Display for the first time since its founding.

The start is still promising.

According to FnGuide, a financial information provider, the average estimated sales for the fourth quarter by securities analysts are 7.1989 trillion KRW for LG Innotek and 7.0483 trillion KRW for LG Display. Since LG Display's lower bound estimate has dropped to 6.378 trillion KRW, if LG Innotek raises its sales to the upper bound estimate of 7.512 trillion KRW, it will surpass LG Display's annual sales performance. The industry expects LG Innotek to record its highest quarterly performance in the fourth quarter by deferring the impact of the Apple iPhone 15 launch, which should have been reflected in the third quarter results, to the fourth quarter.