Hyundai Motor Securities on 28 raised its target price for LG Innotek to 710,000 won from 390,000 won, an 82% increase, citing expectations for growth in its package-substrate business and improving conditions for its optical solutions unit. It maintained a “buy” rating.
Analyst Kim Jong-bae said the stock’s recent surge reflected rising optimism about the package-substrate market, LG Innotek’s fast execution and near-term results. He added that a recovery in optical solutions “is a key basis” supporting earnings growth, and said growth potential should be higher than in 2021-2022, when the company’s expansion was centered on optics.
LG Innotek reported first-quarter consolidated revenue of 5.5348 trillion won and operating profit of 295.3 billion won, well above market expectations. Revenue rose 11% from a year earlier and operating profit jumped 136%. The firm attributed the performance to favorable exchange rates, stable camera-module pricing and premium-led demand for North American smartphones.
Hyundai Motor Securities expects strength to continue in the second quarter, estimating revenue of 4.9034 trillion won and operating profit of 137.9 billion won, up 25% and 1,063% year over year, respectively. It cited strong North American smartphone sales, a sustained weak won and improved conditions for camera pricing negotiations.
The package-substrate business was highlighted as a key growth engine. The brokerage expects market-share gains in RF-SiP on the back of technical capabilities, and said a shift toward 6G and higher specifications could support a high-margin structure. Entry into FC-CSP for memory and FC-BGA for servers was also cited as a medium- to long-term growth driver.
Despite the sharp rise in the share price, Kim said the stock still looks reasonable, trading at a 2026 price-to-earnings ratio of 12.4 and a price-to-book ratio of 1.9. He said the company has entered an upcycle in which both earnings and momentum are strengthening.
* This article has been translated by AI.
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