LG Innotek shares surge on anticipation of Apple Car, new iPhone 

Shares of Korean companies supplying parts to Apple rose sharply on Thursday.

The jump comes on the back of robust iPhone sales and buzz that the US tech giant could release its first vehicle earlier than expected. 

LG Innotek Co., Ltd. finished Thursday's trade 7.8 percent higher at 361,500 won per share, renewing the record high from the previous day. Jahwa Electronics Co., Ltd. surged 10.87 percent to finish the trading day at 26,000 won. 

The LG affiliate develops and manufactures mobile phone parts such as mini vibration motors, LCD modules, light-emitting diodes (LEDs), camera modules and protection circuit modules. Jahwa is also a parts supplier, manufacturing a variety of magnetic electronic components.

For LG Innotek, strong demand for iPhone 13; and expectations that the iPhones to be released in the latter half of next year will boast more pixels, bumped up share prices. 

The more pixels an image starts with, the higher the resolution. For LG Innotek, it equates to higher price tags it can slap on the parts it produces. 

In addition to better cameras, the excitement surrounding the possible launch of VR headsets by Apple is also boosting LG’s share prices. For these headsets, high-performance cameras are a must, of which the company is the industry leader.

Jahwa shares are buoyed by news that it will manufacture parts for new iPhones.

LG Electronics Inc. shares are also up on news of Apple revising the release date of its first vehicle to earlier than previously expected. 

Of the three Apple-supplying shares, analysts are the most bullish on LG Innotek because iPhone sales are expected to remain strong. 

Last month, LG Innotek’s total sales in 2022 were estimated to be around 14.6 trillion won, according to data from financial information provider FnGuide. That estimate has since increased 3.6 percent to 14.8 trillion won. 

This month alone, seven securities firms have adjusted their LG Innotek target prices upward.

Kim Rok-ho, an analyst from Hana Financial Group said he forecasts continued hikes in LG Innotek shares; driven by the strong sales of the iPhone 13 series and increased pixels for next-generation cameras to be equipped on the mobile phones.

Kim’s target for Innotek stands at 415,000 won per share.

Write to Sul-gi Lee at surugi@hankyung.com
Jee Abbey Lee edited this article.