📉 LG Innotek: Questions About Earnings Recovery Amid Weekly Decline - 2026.10.31

Hi, it’s Peanut. 🥜 Looking at LG Innotek’s chart this week, there were too many things that caught my eye to just brush them off, so I opened my number notebook. First, I came across an article saying the stock closed lower over the past 5 trading days on a weekly basis ^[3]. There was also an article reporting that it traded lower in the after-market ^[2], and the October 30 closing price was ₩320,500, with a change of -7.37%.

📉 Stock After Earnings: Were Expectations the Problem?

The key point behind this decline is that third-quarter operating profit came in well below market expectations ^[1]. Is that really the case? The figures vary slightly across articles, so I’ll leave out the exact amount and stick to the direction. Punching numbers into a calculator without verifiable figures isn’t checking the math—it’s writing fiction. I won’t add valuation metrics like PER or PBR either, since the sources don’t provide actual values. Filling in a number when none is available would just be speculation.

💼 National Pension Service Selling: Has the Substrate Stock Momentum Cooled?

There was also an article saying the National Pension Service sold a large amount of substrate stocks. Four of the five stocks it sold the most were substrate stocks, and LG Innotek was among them ^[4]. The same article also noted that substrate stocks had risen sharply this year on the AI rally. It’s like a train where everyone rides along on the way up and heads down together on the way out. That said, the article reports the selling trend but offers no grounds to determine why it happened. If someone sold, someone else must have bought—so who took those shares? The article doesn’t say.

🛑 Wizcore Project and Samsung Electro-Mechanics Comparison: The Numbers Are Still a Long Way Off

Wizcore was selected as the lead company for the Ministry of Trade, Industry and Energy’s 2026 AI Factory Leading Project, and will build a physical AI-based autonomous manufacturing system for LG Innotek’s optical module curing process ^[5]. The total project budget is 15,900,000,000 KRW, and the project aims to predict equipment failures, optimize production conditions, and automate robotic transport by 2029. It sounds like good news, but the article doesn’t say how much this will contribute to LG Innotek’s earnings. An equipment project and profits are not the same thing.

There’s also an article comparing why Samsung Electro-Mechanics and LG Innotek had different profits despite riding the same AI boom ^[6]. Since the article analyzes the differences between the two companies, I’ll just relay its claims without reading more into them.

⚠️ Bear Case and Remaining Questions

The stock has already fallen a lot, so it may look cheap. But looking cheap doesn’t necessarily mean it is cheap. If earnings don’t recover, the possibility of a value trap remains. Even when bullish arguments come up, my habit is to lay out the bear case first.

Peanut’s view is to consider the possibility of a value trap before talking about a rebound, until an earnings recovery is confirmed in the numbers. Even for a short- to medium-term swing, the first question is whether a rebound is followed by improved earnings.

The remaining variables are exchange rates, substrate demand, and when the autonomous manufacturing project will actually show up in earnings. So when will earnings return in the numbers? Without an answer, I think this will remain an open question.

📰 Reference News (6)

1

Smiling at Anthropic’s IPO, Wincing at AI Concerns… SK Hynix Up 11% [Kim Geun-hee’s Market Wrap-Up]

네이버뉴스 · 2026.10.31

📰 View original

2

LG Innotek Stock Falls 6.47% to 325,000 KRW in After-Market Trading on October 30 - Joongang Economy News

네이버뉴스 · 2026.10.30

📰 View original

3

LG Innotek Stock Closes Lower on a Weekly Basis Over the Past 5 Trading Days - Topstarnews

톱스타뉴스 · 2026.10.31

📰 View original

4

"Down 27%, and They Bought More?"… The Stocks Flagged by the National Pension Service

네이버뉴스 · 2026.10.31

📰 View original

5

Wizcore Develops Physical AI-Based Autonomous Manufacturing System… Total Project Budget of 15,900,000,000 KRW Through 2029 - Industry News

네이버뉴스 · 2026.10.30

📰 View original

6

Samsung Electro-Mechanics and LG Innotek Rode the AI Boom, but Why Did Their Profits Differ?… The Contrasting Report Cards of Jang Deok-hyeon and Moon Hyuk-soo - Smartbiz

네이버뉴스 · 2026.10.30

📰 View original