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Photo = LG Innotek |
[Alpha Biz= Kim Sangjin] Daishin Securities forecasted on Thursday that LG Innotek will enter a period of weakened profit momentum through the first half of next year due to reduced production of the iPhone 16. Although the investment rating remains a "Buy," the target price has been lowered by 7.4% to 250,000 KRW. On the previous trading day, LG Innotek closed at 164,600 KRW.
According to Daishin Securities, LG Innotek's operating profit for Q4 2024 is projected to be 285.5 billion KRW, a 41% decline compared to the same period last year. This figure is below the previous estimate of 332 billion KRW and the market consensus of 336.5 billion KRW. Revenue is expected to fall by 15.7% year-on-year to 6.37 trillion KRW.
Daishin Securities commented, "The operating margin is expected to decline by 0.7 percentage points from previous estimates, settling at 4.5%. Sales slowdown and profitability deterioration, particularly in semiconductor substrates, are anticipated."
They added, "Weaker smartphone demand and inventory adjustments by memory manufacturers are expected to result in lower sales of Flip-Chip Chip Scale Package (FC CSP) and System-in-Package (SIP) than previously estimated. Meanwhile, sales of automotive components are likely to remain stagnant due to weakened demand in the automotive and display markets."
On the iPhone 16, Daishin noted, "Initial sales momentum is weak, but further production adjustments are expected to be minimal. However, profit momentum is projected to weaken until the first half of 2025 due to reduced iPhone 16 production."
Alphabiz Reporter Kim SangJin(letyou@alphabiz.co.kr)
