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Photo = LG Innotek |
[Alpha Biz= Reporter Kim Minyoung] Korea Investment & Securities has given LG Innotek a 'Buy' investment rating and set a target price of 320,000 KRW.
Korea Investment & Securities stated, "LG Innotek is mitigating concerns such as regulatory risks with its North American clients, sluggishness in the Chinese market, and the entry of new rear camera module suppliers in China through a shift towards high-value products." They added, "The increase in average selling price (ASP) due to the focus on high-value products will offset concerns about a decline in sales volume."
Furthermore, Korea Investment & Securities noted, "This year's sales performance for the North American client depends on Generative AI (Gen AI)." They elaborated, "The client has historically adopted a strategy of thoroughly producing market-validated technologies as a latecomer rather than adopting the latest technology quickly. This was the case with 5G and low-power double data rate (LPDDR) 5. There is good reason to expect on-device Gen AI in the second half of the year with the iPhone 16."
Additionally, Korea Investment & Securities explained, "Although several manufacturers have released on-device Gen AI smartphones, clear differentiation among competitors is not yet evident. If a competitor introduces a truly differentiated on-device Gen AI, they could overcome current risks and achieve a rebound in sales volume in the second half of the year based on technological leadership."
Alphabiz Kim Minyoung (kimmy@alphabiz.co.kr)
