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View of LG Innotek factory. (Photo=LG Innotek) |
[Alpha Biz= Kim Jisun] Seoul, April 24, 2025 — LG Innotek (KRX: 011070) delivered better-than-expected earnings in the first quarter of 2025, raising investor hopes for an improved full-year performance.
According to DS Investment & Securities analyst Dae-Hyung Cho, the robust results were driven by front-loaded demand amid ongoing tariff risks and rising panel utilization by Chinese display manufacturers, which boosted demand for substrate materials in the display segment.
In its preliminary earnings report, LG Innotek posted consolidated revenue of KRW 5 trillion and operating profit of KRW 125.1 billion for Q1. These figures exceeded market consensus estimates of KRW 4.5 trillion in revenue and KRW 106.5 billion in operating profit, reflecting year-on-year increases of 15.0% and 28.9%, respectively.
The company’s Optical Solutions division was a standout performer, benefiting from increased shipments for premium models and favorable foreign exchange conditions, which led to a rise in average selling prices (ASP). However, the report noted that continued raw material cost pressures and intensified competition among key clients could delay margin improvements.
DS Investment & Securities has raised its full-year forecast for LG Innotek, projecting revenue of KRW 21.43 trillion and operating profit of KRW 679.3 billion—up 2.1% and 4.9%, respectively, from previous estimates.
Cho emphasized potential upside from increasing market share amid global supply chain diversification and the adoption of advanced front and telephoto cameras in flagship models expected later this year. “Further ASP growth is likely,” he said, “and potential spec upgrades in camera modules for 2026 models could provide an additional boost.”
Looking ahead, Cho also cited the continued anticipation for Apple Intelligence, an AI-powered agent set to evolve Apple’s ecosystem. “Given current price levels, LG Innotek’s stock is more likely to be driven upward by small but solid catalysts,” he added.
As for new businesses, LG Innotek is preparing to begin sample production of its glass substrate products within the year. The company is also diversifying applications for its flip-chip ball grid array (FC-BGA) packages, expanding beyond PC chipsets into CPU and server segments.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
