April 27, 2024

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[THE INVESTOR] LG Innotek’s earnings will significantly improve due to the favorable exchange rate and launch of products targeting new models, said DB Financial Investment on June 26, maintaining a “buy” recommendation and 170,000 won (US$152.38) target price.

Its operating loss in the second quarter will come in at 2.7 billion won, considerably lowering the figure from the previous 18 billion won. It could even make it past its break-even point, thanks to the favorable won-dollar exchange rate. As optical solution price remains steady with high market share the loss will be less. Other sectors including LED, printed circuit boards and electronics parts will advance from the first quarter, said analyst Kwon Seong-ryul

Its earnings will rise sharply from the latter half as shipments for a client’s new model will begin in earnest. Camera modules and 3-D sensors will begin to ship from August and the outlook is not bad. Optical solution department’s earnings will improve accordingly and LG Innotek’s earnings in the latter half this year will rise even more than the same period last year, according to the analyst. 

Its stock price recently has fallen more than 10 percent from the peak but considering that second-quarter earnings estimates are likely to be raised and expectations for the latter half are high, investors may purchase its stocks, he added.

By Hwang You-mee (glamazon@heraldcorp.com)