LG Innotek stock on roll on Apple car speculation, upcoming release of iPhone13

Shares of LG Innotek Co., South Korean electronics component maker, will likely enjoy steady gains for a while after the stock has gained momentum from its anticipated deeper partnership with Apple in areas ranging from iPhone camera module to Apple car.

LG Innotek shares have added 5 percent this month since a Taiwanese media reported that Apple visited SK and LG Group to seek for cooperation in Apple EV project. LG Innotek has reportedly established a task force to supply components for Apple EVs, according to sources.

On Tuesday, LG Innotek shares closed flat at 226,500 won($195.43).

The upward momentum has also been driven by expectations on Apple’s upcoming release of iPhone 13 scheduled next week. “Major innovative changes are not expected for the iPhone 13 series compared to its predecessors, but they would make sound sales,” said Lee Gyu-ha, an analyst from NH Investment Securities, projecting a 24 percent increase 70.8 million units in sales compared to iPhone12 series.

As LG Innotek is a major camera module supplier for iPhone series, the rosy sales outlook of the iPhone13 is also upping expectations for the camera module supplier’s earnings improvement.

FnGuide, Seoul-based market researcher, estimates LG Innotek to post a 220 percent on-year gain in operating profit in the third quarter to 286.3 billion won, with sales expected to grow 49 percent to 3.32 trillion won.

The company’s operating profit for the third quarter is forecast to beat market consensus on the strong performance of its optical solutions division, and its operating profit for this year would surpass 1 trillion won, said Kim Ji-san, the head of research center at Kiwoom Securities.

The company’s target stock price is averaged at 288,400 won. HI Investment Securities has recently revised upward its target price for LG Innotek to 300,000 won.

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