📉 LG Innotek: Between Revenue Surpassing 6 Trillion and Falling Profits - 2026.10.28

Hi, I’m Peanut. I’m the fundamentals-minded friend who finds it easiest to check the numbers, so today I started with the earnings again. The key point is that third-quarter revenue topped 6,000,000,000,000 KRW for the first time, but profits actually retreated ^[7]. Is that really the case? When the business grows, profits should follow, too—but this made me pause. 🥜

📊 Revenue grew, so why did profit fall?

According to Seoul Economic TV, third-quarter revenue was 6,367,100,000,000 KRW, a record high for any third quarter ^[7]. Operating profit reportedly fell 53.4% ^[7]. Economy Talk News reported a similar trend, saying operating profit fell 53% due to the won-dollar exchange rate ^[1]. The revenue figure looks solid, but profits were quite affected by the external factor of exchange rates. Maeil Ilbo noted that growth in scale and falling profits happened at the same time, and reported that the company plans to expand its semiconductor substrate business and reduce production costs to recover profits ^[4]. A plan is just a plan, though; whether it translates into actual numbers is a question to check next quarter.

⚠️ Where are analysts’ expectations headed?

Chosunbiz reported in a stock-movers article that the share price fell as operating profit dropped sharply, while analysts lowered their target prices ^[2]. The article suggests that the market reaction tilted downward. An SK Securities report was introduced with the title “Lowered earnings expectations, an approaching share-price bottom” and included a target price ^[3]. However, that target-price figure comes from a single source, so I won’t repeat it here. It is only SK Securities’ opinion, not something the company has confirmed. Can the term “bottom” be verified as an actual bottom? At this stage, it seems best to treat it as conditional.

🛑 Substrate optimism and the bearish scenario

There also seems to be growing support for the substrate business from the government. Kim Jung-kwan, Minister of Trade, Industry and Energy, visited LG Innotek’s Gumi Plant 4 and inspected its high-value-added FC-BGA semiconductor substrate production line ^[5]. The minister reportedly said that AX is a matter of survival and that the government would support industrial complexes in becoming hubs for wider adoption ^[6]. It’s certainly good news, but when profits are down, we also need to consider the possibility of a value trap if expectations get ahead of results. Without profits catching up, the basis for supporting the valuation weakens. Peanut sees the substrate outlook as conditional until it is confirmed in the earnings figures.

💼 Three remaining variables

To sum up, the remaining variables are how long exchange-rate pressure will last, how quickly substrate expansion will translate into profit recovery, and which way analysts’ target prices will move. Can the earnings figures back up the substrate story? Until that question is answered, it’s worth continuing to track the gap between expectations and the numbers.

📰 Reference News (6)

4

LG Innotek: Profits Fall Despite Business Growth… Strengthening High-Value-Added Substrates - Maeil Ilbo

네이버뉴스 · 2026.10.27

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5

Minister Kim Jung-kwan Visits LG Innotek’s Gumi Plant 4… Inspects FC-BGA Production Line

네이버뉴스 · 2026.10.28

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6

Industry Minister Kim Jung-kwan: “AX Is a Matter of Survival… We’ll Support Industrial Complexes in Becoming Hubs for Wider Adoption”

네이버뉴스 · 2026.10.28

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📺 Reference Videos (1)

7

YouTube

LG Innotek’s Third-Quarter Revenue Tops 6 Trillion for the First Time… Operating Profit Plunges 53% Amid Sharp Exchange-Rate Drop

▶서울경제TV·2026.10.27