"Target Price Raised from 650,000 to 1,850,000 Won" Semiconductor Substrate Latecomer Rapidly Narrows Technology Gap [Click e-Stock]

DB Financial Investment Raises LG Innotek Target Price
From 650,000 Won to 1,850,000 Won

On June 2, DB Financial Investment maintained its "Buy" investment rating on LG Innotek and raised its target price from 650,000 won to 1.85 million won.

Hyunji Cho, a researcher at DB Financial Investment, stated, "While the core business of optical solutions remains robust, the package solution segment, despite being a latecomer, is rapidly closing the technology gap faster than expected. We believe this is the point at which the valuation gap with leading companies can gradually be reduced."

LG Innotek Gumi Plant. LG Innotek

Researcher Cho explained that the increase in demand for flip-chip ball grid array (FCBGA) substrates has created more opportunities even for latecomer LG Innotek. She said, "Despite being a late entrant, LG Innotek is quickly enhancing its FCBGA technology based on its capabilities in fine circuit implementation, stacking, and quality stabilization, which it has established in semiconductor substrates." Although the current utilization rate is low, she added that LG Innotek is highly likely to make a preemptive capacity expansion, as it is expected to enter the large-area substrate market for server CPUs next year.

The core business of optical solutions also remains strong. Researcher Cho projected operating profit for the second quarter of this year at 145.4 billion won. This represents a 1,176.8% increase compared to the same period last year. The cumulative sales volume from January to April this year of its North American client, presumed to be Apple, which has a stable supply chain, was the only one to grow year-on-year. She explained that LG Innotek's competitive advantage is expected to continue, and with favorable foreign exchange rates, the company's sales outlook is also positive.

This content was produced with the assistance of AI translation services.