2H earnings miss coupled with market-share loss more likely; downgrade to U/P

研报英文原文证据摘录

2H earnings miss coupled with market-share loss more likely; downgrade to U/P

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LX Semicon

2H earnings miss coupled with market-

share loss more likely; downgrade to U/P

Rating Change: UNDERPERFORM | PO: 25,000 KRW | Price: 39,050 KRW

Downgrade to Underperform; stock downside 30%+ 27 July 2026

We downgrade LX Semicon (LXS) from Neutral to Underperform. The immediate risk Equity

should be market-share loss to Novatek and Samsung Electronics, which are expected to

be the key DDI (display driver IC) suppliers for new iPhone 18 (Pro, Pro Max and even

Key Changesfoldable models). Our new analysis indicates that Apple supply chain companies (OLED,

camera, foundry, etc.) no longer work actively with LXS for new iPhone 18 (which (W) Previous Current

requires more advanced power/heating control, in our view). LXS has retained 50%+/- Inv. Opinion C-2-8 C-3-8

market share in iPhone display DDI (2022-25), but it is likely to decline to 10%+/- for Inv. Rating NEUTRAL UNDERPERFORM

new iPhone 18. Management’s guidance during 2Q earnings call (24 July) was broadly Price Obj. 63,000 25,000

conservative for the DDI business due to uncertain order growth outlook. Customer- 2026E EPS 5,023 2,691

specific data was not disclosed (by LXS), but we assume 10%+ lower sales with only 3% 2027E EPS 5,812 2,061

OPM (was 7%) for 2H26 and 2027-28. This leads to 50-60% EPS estimate cut for 2026- 2028E EPS 6,059 2,050

28. Our new PO of W25,000 from (W63,000) is derived from 12x 2027E P/E (close to l-t 2026E EBITDA (m) 154,184 101,279

historical average including mid-to-downturn period) but it presents >30% stock 2027E EBITDA (m) 167,351 85,654

downside potential. 2028E EBITDA (m) 174,303 87,009

2Q OP slightly better than expected but 2H miss likely Simon Woo, CFA >>