April 25, 2024

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[THE INVESTOR] LG Innotek’s stock price will weaken due to profit taking by investors following the release of a new iPhone model, said KTB Investment and Securities on Sept. 20 while maintaining a “buy” recommendation and 180,000 won (US$160.94) target price. 

Having peaked in early August, its stock price has fallen 30 percent, similar to last year at the the time of unveiling of a new iPhone. This is because there are hardly any changes in specifications and concerns over shipments are strong. The firm’s earnings, however, will remain solid as the conservative shipment estimates, which declined 3.2 percent on-year to 1200 billion as of end-June, have already been reflected. The positive point is that 3D sensing modules have expanded to the full lineup and its relationship with the client is stronger, said analyst Lee Dong-ju.

Its revenue in the third quarter will hike 28.6 percent on-year to 2.3 trillion won and operating profit will more than double to 113.4 billion won, satisfying market consensus. The outlook for iPhone shipments next year also is conservative but there is a consensus that its earnings will improve. Thanks to Apple’s price increase, it is likely that more will opt for triple cameras while adding 3D sensing modules on the back will boost specifications and hence prices, forecast the analyst.

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