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View of LG Innotek factory. (Photo=LG Innotek) |
[Alpha Biz= Reporter Kim Minyoung] On the 16th, Shin Young Securities raised its target price for LG Innotek (011070) by 6%, from 3.3 million KRW to 3.5 million KRW, maintaining a 'Buy' rating. They anticipate improved second-quarter performance due to the long-tail effect of the iPhone.
Shin Young Securities forecasts that LG Innotek's second-quarter sales will reach 4.6 trillion KRW, a 16% increase year-on-year, and an operating profit of 109.3 billion KRW, a 495% increase year-on-year, exceeding consensus estimates by 2% and 18%, respectively.
The firm predicts that the Optical Solutions business unit, a major division of LG Innotek, will see second-quarter sales of 3.7 trillion KRW, a 20% increase year-on-year, and an operating profit of 62.4 billion KRW, marking a return to profitability. They attribute this to sustained long-tail smartphone demand in the second quarter, driven by large-scale promotions by key customers in China and replacement demand from the launch of new iPads, despite being an off-season period ahead of new product launches.
Additionally, Shin Young Securities expects that the line for folded-zoom camera modules will be expanded for next-generation smartphone products from key customers. This is anticipated to lead to further price increases for LG Innotek's camera modules starting in the third quarter, with the release of new smartphone products.
AlphaBIZ Kim Minyoung(kimmy@alphabiz.co.kr)
