Tuesday, March 18th, 2014
SEOUL, KOREA - Kiwoom Securities said on March 17 that the capitalization of LG Innotek will reach 4 trillion won by next year on the back of the rise in LED and camera module sales and adjusted the target price to 150,000 won from 120,000 won. Its investment opinion was maintained at "buy."
Kim Ji-san, Kiwoom Securities analyst, said, "The financial performance of LG Innotek next year will resemble that of 2010 when the company was at its peak. The operating profit is expected to reach 255 billion won, up 19 percent from this year." The biggest factors for the optimistic outlook are given by the rapid increase in the supply of LED lighting devices and camera modules. Especially in the camera module business, LG Innotek has shot up to the rank of the world's No. 1.
The analyst added, "As lightings quickly replaced TVs as the main customers for LED devices, the LED industry's growth potential has increased enormously. The industry can now supply for the 100-trillion-won lighting device market." As for camera modules, he commented, "Camera modules will become a new cash cow beginning next year. Especially as the company increases its supply of the modules to Apple and other customers, it could lower its reliance on LG Group companies."
