We raise our TP by 15% to KRW300,000 (1.14x 2026E P/B) for LGI. Our TP raise reflects: 1) a rerating driven by AI business (AI share of total revenue up from 2% in 2025E to 22% by 2030E); 2) higher 2026E/2027E earnings based on price hikes and volume growth from camera upgrades at a key NA client; and 3) a narrowing valuation gap (1.35x KOSPI P/B above 0.85x LGI P/B). We forecast 2026 revenue at KRW23.1tn (+6% YoY) and OP at KRW818.4bn (+22% YoY), which would mark a recovery to the KRW800bn level for the first time in three years and the first meaningful earnings upcycle since 2021.
■2H25E OP at +41% YoY
We forecast 3Q25 revenue at KRW5.3tn and OP at KRW201.4bn (+1,668% QoQ, +54% YoY), which is above the market consensus on stronger Optics Solution utilization and Substrate & Material profitability gains. For 4Q25, we estimate OP of KRW331.8bn (+65% QoQ, +34% YoY), above the consensus (KRW292.2bn) by 14%. Optics Solution utilization should near peak levels on robust premium-model sales at the NA client. As a result, 2H25 OP should reach KRW533.2bn, up 41% YoY.
■Expect AI revenue share to grow tenfold to 22%
We estimate LGI’s AI business (i.e., humanoid robots, autonomous driving solutions, semiconductor/glass substrates) to grow from KRW400bn in 2025 to KRW7tn by 2030,
with AI revenue share up from 2% to 22%. 1) AI semiconductor substrate revenue should triple YoY in 2026 and surge sevenfold by 2028. 2) Humanoid robot camera revenue should rise tenfold YoY in 2026. As the U.S.?China AI rivalry and security concerns drive global supply chains away from Chinese camera modules, LGI should see a positive spillover effect. Recently, LGI secured a major NA client for its humanoid robots; camera module supply to the top three NA humanoid robot makers should begin going forward.