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JONBUR Research · Update note

LG Innotek · 011070 · Electronic components

LG Innotek: Model Fair Value Estimate Rises to ₩273,058 per Share After Rate and Input Update

Why this report

Written after:

  • Model fair value changeModel estimate of fair value moved +133% (₩117,249 → ₩273,058 per share)Oct 22, 2026

Our model estimate of LG Innotek's fair value moved from ₩117,249 to ₩273,058 per share (base case), a rise of 133%. The estimate is still below the ₩407,000 share price, but the bull case now sits above it.

Written Oct 21, 2026 · Data as of Oct 20, 2026 · 0 views

This is not financial advice. The report does not recommend buying or selling anything.

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What happened

The model base-case estimate rose from ₩117,249 to ₩273,058 per share on 2026-10-22. The bear case moved from ₩0 to ₩69,070 and the bull case from ₩357,922 to ₩586,690. The model is still a 5-year discounted cash flow based on trailing figures to H1 2026, so the financial inputs carry the same as-of date as before. The discount rate fell from 11.6% to 10.9%. No new company filings are attached to this change. The latest filings in the data are the earnings-date notice and a 5%+ holding report, both dated 2026-10-02. The price data runs to 2026-10-20, when the close was ₩407,000. The model change is therefore about assumptions, not about a new corporate event. The data does not show which assumptions besides the rate changed.

What it changes for the thesis

The previous report described a large component maker with thin margins: a trailing operating margin of 4.4% on ₩24.0T of revenue, ROE of 11.3%, and a very volatile share price. None of those facts has changed. Trailing revenue is still ₩24.0T, operating income ₩1.07T and net income ₩663B. Free cash flow is ₩225B. The view that profitability has recovered from 2025 but remains well below 2021-2022 levels still holds. Management comments on FC-BGA contracts and glass substrates from 2028 remain statements in news headlines, not figures in filings. The thesis is unchanged; only the model's reading of it has shifted.

What it changes for the valuation

The model now gives a base case of ₩273,058 per share, with a bear case of ₩69,070 and a bull case of ₩586,690. The previous report had ₩117,249 base, ₩0 bear and ₩357,922 bull. The share price of ₩407,000 is about 49% above the new base case, whereas it was far above even the old bull case. The price now falls inside the bear-to-bull range, between the base and bull cases. The spread of ₩69,070 to ₩586,690 is still very wide, so the result is highly sensitive to assumptions. A fall of 0.7 percentage points in the discount rate, together with whatever other inputs changed, more than doubled the base case. That shows how much a long-duration cash flow model reacts to small input changes. Current multiples are unchanged from the earlier report: P/E 14.5, P/B 1.5 and dividend yield 0.5%. This is a model estimate based on the assumptions shown, not a price target or a signal to act.

Closing view

The 133% jump in the model estimate reflects changed model assumptions, not new results or filings. The company's reported numbers are the same as in the initiation report. The market price remains above the base case, but it is now inside the model's range rather than beyond it. That makes the gap look smaller, though it mostly shows how uncertain the model is, given a bear-to-bull spread of more than eight times. Readers should treat the new figure as one input among several, alongside margin recovery, volatile prices, foreign ownership slipping from 28% to 26% over 60 days, and unproven management expectations. This note makes no recommendation.

Model estimate of fair value

Bear
₩69,070
-82%
Base
₩273,058
-27%
Bull
₩586,690
+57%

Model estimate based on the assumptions shown. Not a price target and not a buy or sell signal.

Base case of the 5-year discounted cash flow model on the stock's Valuation tab (statements TTM to H1 2026; discount rate 10.9%). Bear and Bull move the main assumptions by fixed steps. See and change the assumptions

Filings and data used

Report history

  1. Oct 21, 2026Update noteModel fair value changeLG Innotek: Model Fair Value Estimate Rises to ₩273,058 per Share After Rate and Input Update
  2. Oct 18, 2026InitiationStart of coverage (redone with new statements)LG Innotek: Sharp Share Price Swings, Thin Margins and a Model Estimate Far Below the Market Price

Built only from jonbur's own data: prices and investor flows, filed financial statements and filings, and news headlines. Disclosed (filed) data is labelled as such. Written by AI and may contain mistakes.

This is not financial advice. The report does not recommend buying or selling anything.

Source: KRX statistical information