[Edaily Reporter PARK MIN ] On the 29th, DS Investment & Securities maintained its “Buy” rating and target price of 1.3 million won for LG Innotek(011070), stating that investors should focus on the revaluation of the company’s packaging solutions division—led by flip-chip ball grid array (FC-BGA)—rather than short-term earnings volatility in the third quarter caused by the sharp drop in the exchange rate. This represents an upside potential of 124.9% compared to the previous trading day’s (September 28) closing price of 578,000 won.

In a report published today, Cho Dae-hyung, an analyst at DS Investment & Securities, stated, “The weak third-quarter earnings were already anticipated, as the won-dollar exchange rate fell sharply between the beginning of the quarter—when purchases were made—and the end of the quarter—when sales were recognized,” adding “Excluding the exchange rate, demand from clients remains robust, and the rise in average selling price (ASP) driven by upgraded camera module specifications—such as the adoption of variable apertures—is proceeding smoothly; therefore, the short-term decline in the stock price actually presents a buying opportunity,” he said.

According to DS Investment & Securities, LG Innotek(011070)’s third-quarter consolidated revenue is estimated at 5.6051 trillion won, a 4.4% increase year-over-year; however, operating profit is projected to be 138.9 billion won, a 31.9% decrease, falling short of the market consensus (operating profit of 302.0 billion won). Nevertheless, analysts note that since the price increases for new products from key North American customers were set within the expected range, concerns about a slowdown in Chonbang set demand are considered excessive.

Amid this earnings volatility, the growth momentum of the Package Solutions Division is standing out. The division recently secured a new customer for PC central processing units (CPUs) and has entered full-scale mass production; in the second half of the year, it is expected to expand mass production orders centered on server switches. Amid tight supply conditions for high-end printed circuit boards (PCBs), demand to proactively secure inventory is rising, and an increasing number of customers are expressing interest in long-term supply agreements (LTAs). Consequently, the possibility of additional production facility expansions in the future is being raised.

The AI agent ecosystem, which has rapidly emerged following OpenAI’s release of “Muse,” was also cited as a structural growth driver. Given the nature of AI agents—which utilize virtual machines per user—demand for high-performance CPUs is surging. Analysts predict that, in line with the initial market expansion, demand for FC-BGA for CPUs will grow and the pace of product mix improvement will accelerate faster than expected.

DS Investment & Securities projected that LG Innotek(011070)would post annual revenue of 24.5482 trillion won and operating profit of 1.0663 trillion won in 2026. This represents a year-over-year increase of 12.1% in revenue and 60.3% in operating profit. The firm further predicted that the company will continue its strong performance trend in 2027, with annual revenue of 26.463 trillion won and operating profit of 1.4046 trillion won.