IBK Investment & Securities maintained its investment opinion 'buy' and target stock price of 300,000 won on the 1st, saying that LG Innotek is expected to improve its profits due to the peak season effect in the third quarter.
"LG Innotek's sales in the third quarter of this year amounted to 3.4684 trillion won, a 47.3% increase from the second quarter, an increase from the previous forecast,"IBK Investment & Securities said.
"The increase in sales will be led by optical solutions.". "Sales materials are expected to grow by more than 10%, and electric parts and other business divisions expect a 5% increase in sales," IBK Investment & Securities said.
"We expect operating profit in the third quarter of 2021 to be 316.4 billion won, which is more than doubled from the second quarter.".
Operating profit growth is also driven by optical solutions, and substrate materials are expected to improve compared to the second quarter. Increased volume and exchange rate effects also affected profit improvement.
"LG Innotek's performance improvement is divided into two main pillars,"said IBK Investment & Securities. "One is the increase of sales due to the enhancement of camera functions of overseas smartphones, and the other is the improvement of profitability due to the suspension of business and the improvement of cost structure.".
Reporter Lee Dong-hoon usinvestmentidea2020@gmail.com
