April 19, 2024

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[THE INVESTOR] LG Innotek’s operating profit will increase significantly in the latter half, said DB Financial Investment on Aug. 24, maintaining a “buy” recommendation and 220,000 won (US$195.47) target price. 

As its overseas strategic client will release a new model in September, the optical solution division’s revenue in the third quarter will more than double. Operating profit will take jump to 104.6 billion won in the third quarter and 185 billion won in the next, from 13.4 billion won, boosted by increasing ratio of 3D-sensing modules, as well as strong sales of optical solutions, said analyst Kwon Seong-ryul. 

Next year, revenue from optical solution division will increase further as the client is likely to adopt triple cameras, pushing average price of LG Innotek’s camera modules by at least 30 percent. As it has already supplied triple cameras to a number of vendors, lowering the margin of errors, and revenue hike can directly lead to improved profits. The positive effects are only beginning. The high season, increasing use of 3D-sensing modules and triple cameras will dramatically lift its bottom line, said the analyst, adding that the recent stock price decline should be an opportunity to buy. 

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