[THE INVESTOR] LG Innotek, the electronics parts unit of LG Group, is expected to improve profits in the latter half of this year on the growing demand for its dual-camera modules used in smartphones.

HMC Investment and Securities said on Aug. 4 that LG Innotek will secure more orders especially in the US as its rival Sony has failed to meet the demands due to a recent earthquake at its Japanese plant.

The company suffered sluggish sales due to reduced shipments of its key clients Apple and LG Electronics. In the second quarter, it posted an operating loss of 34 billion won.

“LG Innotek shares surged more than 30 percent from the bottom price now on new expectations about Apple’s possible adoption of dual-camera modules for its new iPhones along with growing prices of LED chips,” said Noh Geun-chang, analyst at HMC.

The analyst, however, was still cautious about the company turning to profitability anytime soon, hinting that he would adjust the target price based on the size of the Apple deal.

The Korean firm is a market leader in smartphone camera modules. It is especially pinning high hopes on the more lucrative dual-lens camera modules that have been increasingly adopted by global handset makers.

Apple is widely rumored to use the dual-lens camera modules for its upcoming iPhone 7 that comes out in September.

By Lee Ji-yoon (jylee@heraldcorp.com)