---
title: "Korea's top 1% traders dump LG Innotek as brokers cut its quarter by half and blame the won"
description: "Korea's top-returning retail traders sold LG Innotek on Monday, ahead of third-quarter results the whole street already expects to miss. The dispute is the cause: a won-dollar timing accident the bulls call temporary, or phone order cuts no report has tied to the company by name."
publisher: "The Inference"
section: "Money"
published: 2026-10-12T15:18:53.992Z
modified: 2026-10-12T15:18:53.992Z
canonical: https://theinference.org/article/korea-s-top-1-traders-dump-lg-innotek-as-brokers-cut-its-quarter-by-half-and-blame-the-won
language: en
keywords: "Apple, Earnings, South Korea, Currency, Semiconductors"
---

# Korea's top 1% traders dump LG Innotek as brokers cut its quarter by half and blame the won

> Korea's top-returning retail traders sold LG Innotek on Monday, ahead of third-quarter results the whole street already expects to miss. The dispute is the cause: a won-dollar timing accident the bulls call temporary, or phone order cuts no report has tied to the company by name.

LG Innotek fell 12.94 percent on Monday October 12 to 498,000 won, down 73,500 won [1]. The Korean company supplies the variable-aperture main camera module for [Apple](https://theinference.org/markets/companies/apple)'s iPhone 18 Pro, and its optical business, sold almost entirely to Apple, made up about 82 percent of second-quarter revenue [10].

The stock [topped the sell list](https://en.sedaily.com/news/2026/10/12/top-1-percent-traders-snap-up-chipboard-maker-tlb-dump-lg) of [Mirae Asset Securities](https://theinference.org/markets/companies) clients whose one-month returns rank in the top 1 percent [1]. The selling appears to follow forecasts that third-quarter earnings will fall short of market estimates [1]. At Monday's price, the stock sits about 73 percent below its June 1 peak of 1,814,000 won [2].

## The miss is already in the price

Parent [LG Electronics](https://theinference.org/markets/companies) reported [preliminary third-quarter operating profit of 781.8 billion won](https://www.marketscreener.com/news/lg-electronics-releases-preliminary-earnings-for-third-quarter-2026-ce785dd9de8df726) on October 7, 19.9 percent below the 975.7 billion won consensus; its shares fell more than 9 percent and brokers named LG Innotek as the drag [3][4]. The mechanism is a currency time lag: materials bought in the second quarter, when the dollar was strong, flow into third-quarter costs, while finished modules ship at the weaker prevailing rate [3]. The won closed the second quarter at 1,549.4 to the dollar on June 30; the third-quarter average was 1,418.6, the [steepest three-month fall in 28 years](https://www.msn.com/en-xl/money/economy/won-drops-200-won-against-dollar-in-three-months/ar-AA2dMYzZ) [5]. That gap between input cost and selling price cannot be closed inside one quarter.

Shinhan Investment & Securities cut its third-quarter estimate for LG Innotek from 304 billion won to 156.9 billion won, and Meritz cut its own by 53.6 percent to 150.1 billion won [3]. Kiwoom sees 91.7 billion won, down 55 percent year on year; Yuanta sees 78.7 billion [3][6]. All four sit below the 245.8 billion won LG Innotek earned in the second quarter [10].

*Chart: **LG Innotek's Q3 profit estimates run from 79 to 157 billion won, against Shinhan's old 304 billion won** Bar chart comparing four brokers' estimates for LG Innotek's Q3 2026 operating profit against the 304 billion won estimate Shinhan held before its cut.*

*Broker estimates for LG Innotek's July to September 2026 operating profit, in billions of won; the line marks Shinhan's estimate before its cut. Sources: [3], [6]. [3][6]*

## The defense: a timing accident at 12 times earnings

Kiwoom kept a [1.1 million won target and a buy rating](https://en.sedaily.com/news/2026/10/06/lg-innotek-down-67-percent-from-peak-but-kiwoom-sees-11) [2]. "Setting aside the exchange rate, business conditions are solid with no meaningful change," analyst [Kwon Min-kyu](https://theinference.org/markets/people) wrote, and the stock trades near 12 times earnings against a three-year average of 11.6 [2]. Yuanta [cut its target to 1.2 million won from 1.4 million but kept the buy](https://biz.chosun.com/en/en-finance/2026/10/08/IF2VJ2P6WBA45MK54LKZ7SZ7II/), expecting selling prices to rise as variable apertures reach existing modules and cost pressure to ease from the fourth quarter [6]. Market share and average selling prices have not meaningfully declined [3]. The longer case is substrates, the boards that link high-performance chips: LG Innotek is discussing supply agreements averaging four to five years with major FC-BGA clients [6][10].

## The prosecution: the customers are cutting

The bear case is demand, not currency. Apple [cut October component orders for the iPhone 18 Pro by 15 to 20 percent](https://www.macrumors.com/2026/10/09/apple-cuts-iphone-18-pro-orders-price-demand/) after memory costs pushed its starting price up $100 [7][8]. [Samsung](https://theinference.org/markets/companies) has told suppliers to ship 20 to 30 percent fewer components and will cut fourth-quarter phone output by as much as 30 percent [9]. No report ties either cut to LG Innotek by name. But its optical business is sold almost entirely to that same customer [10], and the substrate offset arrives late: FC-BGA reaches PC CPUs this quarter, server switches in 2027 and server CPUs in 2028, with Vietnam volume production from 2028 [6].

## The deciding number is fourth-quarter margin

LG Innotek finalizes third-quarter results later this month [3]. Yuanta's test is mechanical: inputs bought at the cheaper rate flow into production and margins rebound [6]. If they rebound, the won explains the miss. If October's order cuts surface in shipment guidance instead, demand does.

## Takeaway

Korea's top 1% retail traders dumped LG Innotek into a third quarter every broker already expects to miss; whether the won or the order cuts are to blame is decided by fourth-quarter margins.

## Sources

1. [Seoul Economic Daily, "Top 1% Traders Snap Up PCB Maker TLB, Dump LG Innotek", 12 October 2026](https://en.sedaily.com/news/2026/10/12/top-1-percent-traders-snap-up-chipboard-maker-tlb-dump-lg)
2. [Seoul Economic Daily, "LG Innotek Down 67% From Peak, But Kiwoom Sees 1.1 Million Won", 6 October 2026](https://en.sedaily.com/news/2026/10/06/lg-innotek-down-67-percent-from-peak-but-kiwoom-sees-11)
3. [Yonhap Infomax, "LG Electronics Shares Plunge Over 9% as LG Innotek Weakness Drags Down Operating Profit", 8 October 2026](https://en.infomaxai.com/news/articleView.html?idxno=142268)
4. [MarketScreener (Publicnow), "LG Electronics: Releases Preliminary Earnings for Third-Quarter 2026", 6 October 2026](https://www.marketscreener.com/news/lg-electronics-releases-preliminary-earnings-for-third-quarter-2026-ce785dd9de8df726)
5. [The Chosun Ilbo, "Won drops 200 won against dollar in three months", 7 October 2026](https://www.msn.com/en-xl/money/economy/won-drops-200-won-against-dollar-in-three-months/ar-AA2dMYzZ)
6. [ChosunBiz, "Yuanta cuts LG Innotek target on won slide, keeps buy as Korea substrate growth builds", 8 October 2026](https://biz.chosun.com/en/en-finance/2026/10/08/IF2VJ2P6WBA45MK54LKZ7SZ7II/)
7. [MacRumors, "Apple Reportedly Cuts iPhone 18 Pro Orders After Price Hike Dampens Demand", 9 October 2026](https://www.macrumors.com/2026/10/09/apple-cuts-iphone-18-pro-orders-price-demand/)
8. [24/7 Wall St., "Apple Drops 3% on Reported iPhone 18 Pro Component Order Cuts; Skyworks Slips, Qualcomm Treads Water", 9 October 2026](https://247wallst.com/investing/2026/10/09/apple-drops-3-on-reported-iphone-18-pro-component-order-cuts-skyworks-slips-qualcomm-treads-water/)
9. [Android Headlines, "High component costs force Samsung to panic-cut Galaxy phone output", 8 October 2026](https://www.msn.com/en-us/technology/hardware-and-devices/high-component-costs-force-samsung-to-panic-cut-galaxy-phone-output/ar-AA2dPsCL)
10. [The Korea Herald, "LG Innotek ramps up iPhone 18 Pro camera, AI substrate output", 10 August 2026](https://www.koreaherald.com/article/10836126)


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Korea's top 1% traders dump LG Innotek as brokers cut its quarter by half and blame the won — The Inference. Canonical: https://theinference.org/article/korea-s-top-1-traders-dump-lg-innotek-as-brokers-cut-its-quarter-by-half-and-blame-the-won