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LG Innotek manufacturing facility. (Photo: LG Innotek) |
[Alpha Biz= Ellie Kim] Shares of LG Innotek have surged nearly 110% over the past month, hitting record highs as investors bet on strong earnings growth driven by the AI boom and recovery in semiconductor substrate demand.
The stock closed 4.34% higher at KRW 793,000 on May 19, after touching an all-time high of KRW 829,000 במהלך intraday trading—outperforming the broader market even as the KOSPI fell sharply.
The rally is underpinned by improving fundamentals. LG Innotek reported Q1 revenue of KRW 5.53 trillion and operating profit of KRW 295.3 billion, up 11% and 136% year-on-year, respectively, significantly beating market expectations.
While the company still derives about 84% of its revenue from camera modules supplied to Apple, analysts say the recent stock surge is increasingly driven by growth expectations in its semiconductor package substrate (SiP) business.
With global big tech firms ramping up AI investments, supply shortages in advanced substrates are pushing up prices and margins. Although the package solutions segment currently accounts for only about 8% of total revenue, its contribution to operating profit is expected to rise sharply—from 19% last year to an estimated 21% this year and 30% next year.
Market watchers also point to a growing number of long-term supply agreements (LTAs) with major tech companies, which are improving earnings visibility and stability.
Some analysts suggest LG Innotek could follow a similar valuation re-rating trajectory seen in Samsung Electronics and SK Hynix during past semiconductor upcycles, noting that the stock may still have further upside despite the recent surge.
Alphabiz Ellie Kim 인턴기자(press@alphabiz.co.kr)
