Daishin Securities Raises LG Innotek Target Price to 1.3 Million Won

 
Daishin Securities has raised its target price for LG Innotek to 1.3 million won, reflecting the company's competitive edge in the camera module business and strong performance improvements. The investment recommendation remains a 'Buy.'
 
In a report released on June 24, analyst Park Kang-ho noted, "The key investment points are the robust performance and competitiveness of the optical (camera) business," adding that profit growth in the optical solutions sector is expected to exceed market consensus in the second half of 2026 and into 2027.
 
Park forecasts that LG Innotek's consolidated operating profit for the second quarter of this year will reach 193.6 billion won, a staggering 1,599% increase compared to the same period last year. This figure is approximately 30.2% above market consensus. Revenue for the same period is projected to be 5.1 trillion won, reflecting a 27.4% year-on-year increase and surpassing consensus by 3.2%.
 
As a result, Daishin Securities has adjusted its earnings per share (EPS) forecasts for 2026 and 2027 upward by 7.9% and 12.8%, respectively, while raising the target price to 1.3 million won. The firm anticipates improved profitability in the semiconductor substrate business and an increased share of server FC-BGA sales, alongside a reassessment of the profitability of optical solutions.
 
The annual performance is also expected to show continued improvement. Operating profit for the first half of 2026 is estimated at 488.9 billion won, a 258% increase year-on-year, with a projected 12.7% increase to 595.6 billion won in the second half. This would result in an annual operating profit of 1.08 trillion won, an 11.4% increase from the previous year. Notably, the improved product mix due to the increased production of Apple's premium iPhones and strong sales of the iPhone 17 are expected to drive performance improvements in the optical solutions sector.
 
Park also identified changes in Apple's launch strategy as a long-term growth factor. He stated, "iPhone sales are expected to reach 258 million units in 2026, a 3.1% increase from the previous year, and 273 million units in 2027, a 5.6% increase. Starting in 2027, the number of launch models is expected to expand to 6-7, which will reduce fixed costs for component suppliers. Additionally, the introduction of foldable iPhones and a special model for the 20th anniversary could further enhance performance prospects."