[THE INVESTOR] LG Innotek will miss earnings estimates in the third quarter but will begin to rise in earnest, said Shinhan Investment on Sept. 25, maintaining a “buy” recommendation and 200,000 won (US$176.77) target price. 

The delayed camera supply to its North American client has dented its third-quarter earnings, and operating profit, despite surging 145 percent on-year to 50.3 billion won, said analyst Park Hyeong-woo.

In the coming quarter, however, its earnings will be record high at 163.2 billion won operating profit, up 39 percent on-year, as LG Electronics and the North American client release new smartphone models, forecast the analyst. 

The upturn will continue into next year propelled by the strong sales of camera modules, as more smartphones opt for dual cameras, and in 2019, 3-D cameras might be commercialized, said Park. Revenue next year will rise 14 percent on-year to 8.15 trillion won and operating profit by 75 percent to 549 billion won, he estimated. 

Its underperforming sectors, printed circuit board and LED, will turn to black next year at the latest, added the analyst. 

By Hwang You-mee (glamazon@heraldcorp.com)