Brightened LG Display... "Expectations for the Second Half"

Improved Earnings Expected Due to Rising LCD TV Panel Prices... Target Prices Raised Across the Board

[Asia Economy Reporter Kum Boryeong] Optimistic outlooks are being raised for LG Display this year.

According to Korea Investment & Securities on the 6th, LG Display's Q4 performance last year recorded sales of 6.4 trillion KRW and an operating loss of 421.8 billion KRW due to the sluggish LCD (liquid crystal display) market. Sales decreased by 8% compared to the previous year, and operating profit turned to a loss.

Unlike last year, this year, the rise in LCD TV panel prices is expected to positively impact LG Display's performance improvement. In particular, due to the impact of the novel coronavirus infection (Wuhan pneumonia), China's production, which accounts for more than 50% of the world's LCD panel supply, is expected to decrease by up to 20-30%. If the novel coronavirus does not subside next month, there are also predictions that the reduction in LCD panel supply will intensify, turning the market into a supplier's advantage market.

Yoo Jong-woo, a researcher at Korea Investment & Securities, explained, "In the first quarter, panel supply will decrease, so the benefit from panel price increases will not be significant. However, from the second quarter, profit increases due to the rise in LCD panel prices will appear, contributing to performance improvement."

From the second quarter, when the OLED TV panel factory in Guangzhou, China, begins full-scale operation, the large OLED business is highly likely to get on track in the second half of the year. Also, in the first quarter, automotive plastic OLED (POLED) is already being supplied. Since the unit price per area of automotive POLED is about 5 to 10 times higher than that of smartphones, it is expected to play a cash cow role in the future.

Securities firms have raised their target stock prices for LG Display. DB Financial Investment raised its target price from the previous 18,000 KRW to 20,000 KRW. Shinhan Financial Investment raised it from 21,000 KRW to 22,000 KRW, and Eugene Investment & Securities raised it from 16,000 KRW to 17,000 KRW. Kwon Seong-ryul, a researcher at DB Investment & Securities, said, "Various conditions for a rebound are being prepared, and a foundation for business transformation focused on OLED is being laid. If the off-season in the first half of this year passes well, some results will appear, and considering the situation that will unfold from the second half, it is time to pay more attention to LG Display."

This content was produced with the assistance of AI translation services.