Apple-oriented Component Stocks, Recovering from Slump and Starting Uptrend?

Expectations for New Product Launches like AI iPhone and OLED iPad
"Possible Mass Replacement Demand for iPhone and Entry into OLED Upcycle"

Market attention is focused on whether Apple-related component stocks can break free from their first-quarter slump and achieve a sustained upward trend. Securities firms analyze that increased sales of new products such as the iPhone and iPad in the future could have a positive impact on related domestic companies.

According to the Korea Exchange on the 16th, Apple-related domestic component stocks such as BH (48.45%), LG Innotek (28.51%), PNH Tech (10.01%), LG Display (9.23%), and Duksan Neolux (6.22%) have shown an upward trend over the past month.

Throughout the first quarter of this year, Apple-related stocks showed a sluggish performance. This was due to weak iPhone sales in China, concerns over annual shipment declines caused by the lack of AI momentum at Apple, and delays in the release of the iPad Pro initially expected at the end of March, resulting in an overall correction. However, recent expectations for new product launches such as AI iPhones and OLED-applied iPads are evaluated to potentially influence the performance growth of the domestic Apple-oriented value chain.

On the 7th, Apple held the 'Let Lose' event and unveiled the latest tablet PC, the new iPad Pro lineup. This product came after the longest gap in new model releases in history, 18 months, attracting market expectations. In particular, Apple emphasized the OLED panel with two stacked light-emitting layers, raising hopes for the expansion of the OLED ecosystem in the market. Additionally, Apple plans to specifically announce the AI features of the iPhone 16 at the upcoming Worldwide Developers Conference (WWDC) next month. Accordingly, the industry is paying close attention to the future performance of domestic vendors producing iPhone components or mass-producing panels for OLED-applied iPads.

Jongbae Kim, a researcher at Hyundai Motor Securities, stated, "Following Apple's first-quarter earnings announcement, domestic related companies are showing positive stock trends, supported by better-than-expected sales in China." He added, "Although the first-quarter sales volume of the iPhone was clearly negative, the market's concerns about this were excessive." He further explained, "An upward momentum is expected from the launch of the OLED iPad, so we maintain a favorable view on display material and panel companies," noting, "The application of OLED in new IT devices means the market is newly blossoming." He also added, "Domestic display sectors such as LG Display, Duksan Neolux, and PNH Tech could benefit."

Moreover, the market is also anticipating Apple’s upcoming AI smartphone equipped with ChatGPT functionality integrated into the next operating system, iOS18. Dongwon Kim, a researcher at KB Securities, predicted, "The new product scheduled to be unveiled in September will be the first AI model since the iPhone launch and is expected to feature the largest-scale operating system update ever, stimulating iPhone replacement demand." He continued, "Concerns about the recent iPhone slump are turning into expectations ahead of WWDC, which will increase the benefit intensity for Korean component companies such as LG Innotek and BH."