LG Innotek (011070) is entering a new growth phase beyond its camera module-centered business, securing semiconductor substrates as a new growth axis ahead of a major customer's new model launch, according to securities industry assessments. In morning trading on the 31st, the stock was trading at 613,000 won, up 2,000 won from the previous session.

[A Growth Phase Beyond Camera Modules]

Hyundai Motor Securities analyzed that LG Innotek is entering a growth phase different from the past. The key point is that future growth drivers are no longer concentrated solely on camera modules.

LG Innotek's performance has historically been highly sensitive to new smartphone launches by major North American customers and camera specification upgrades. With major customers scheduled to release new models in the second half of this year, the performance trend of the optical solutions business is considered a key variable.

However, Hyundai Motor Securities believes it is difficult to evaluate LG Innotek solely from the perspective of a camera module company as in the past, because the growth potential of its semiconductor substrate business is expanding in earnest.

[FC-BGA-Centered Substrates... A Core Axis of the Global Supply Chain]

Particular emphasis was placed on LG Innotek's changing position in the substrate business centered on FC-BGA. Hyundai Motor Securities said LG Innotek can no longer be seen as a mere latecomer in the substrate market, evaluating that it is establishing itself as a core axis of the global supply chain amid supply shortages.

Expanding investment in artificial intelligence (AI) infrastructure and rising demand for high-performance semiconductors are also affecting demand for high-specification package substrates. If bottlenecks emerge in the related supply chain, the strategic value of substrate makers with production capacity and technological competitiveness could increase.

Accordingly, in future valuations of LG Innotek, the profit contribution of the semiconductor substrate business, alongside the camera module business, is expected to become a key variable. The critical question is how much the existing business structure—which showed strong seasonality depending on optical solutions performance—will be complemented by substrate growth.

[Investment Opinion Maintained at 'Buy'... Target Price Cut from 1.45 Million to 1.03 Million Won]

Hyundai Motor Securities maintained its 'Buy' rating on LG Innotek while lowering its target price from the previous 1.45 million won to 1.03 million won. The firm explained that this target price adjustment was driven more by a change in valuation methodology than by deteriorating earnings outlook.

LG Innotek closed at 611,000 won on the 28th, up 14,000 won (2.35%) from the previous session. On the 31st, the stock rose 2,000 won to 613,000 won intraday, continuing its upward trend.

[Key to Revaluation: Proving Multiple Growth Drivers]

Going forward, key checkpoints for the stock will include not only new smartphone sales performance of major customers and camera module results, but also order expansion and profitability improvements in the substrate business, including FC-BGA. The core of any revaluation will be whether LG Innotek can demonstrate multiple growth drivers—including substrates—in actual earnings, moving beyond its existing evaluation as a camera-centered company.

[※ This article is for informational purposes, based on securities firm analysis reports, company disclosures, and intraday market information. It does not recommend the purchase or sale of specific stocks or guarantee investment returns. Intraday stock prices may fluctuate during trading, and securities firms' target prices and earnings forecasts may also change depending on market conditions and corporate performance. The final investment decision and responsibility rest with the investor. This article was written with AI assistance.]