[Click eStock] "LG Display, Earnings Expected to Be Hit by COVID-19 Impact... Target Price Down"

[Asia Economy Reporter Park Jihwan] Samsung Securities evaluated LG Display's first-quarter earnings on the 24th as in line with market expectations but stated that it has entered a fog of a full-scale demand decline. In conclusion, it is analyzed that a performance hit is inevitable due to the demand decrease caused by the impact of the novel coronavirus infection (COVID-19). Accordingly, the investment opinion was maintained as Neutral (Hold), and the target price was lowered by 7% to 13,000 KRW.

Jang Jeonghoon, a researcher at Samsung Securities, analyzed, "LG Display's first-quarter sales amounted to 4.7 trillion KRW, and the operating loss was 362 billion KRW," adding, "This is a level consistent with market consensus."

Researcher Jang explained, "The price per unit area decreased by 5% compared to the previous quarter, and the shipment area decreased by 24%. TV panels increased to 31% from 28% in the previous quarter, which is due to panel price increases and a higher sales proportion of OLED TVs."

While IT panel demand in the untact era is positive, a slowdown in demand for high-end TV panels is inevitable. Researcher Jang stated, "The increase in online demand for IT panels due to expanded remote work or online classes caused by COVID-19 is positive, but high-end OLED TV demand is inevitably impacted due to online sales restrictions," and forecasted, "Annual sales are expected to reach 19 trillion KRW with an operating loss of 542 billion KRW this year."

He said, "The demand shock will be fully felt from the second quarter," adding, "The decrease in TV sales in the second quarter leads to inventory management by set manufacturers, which may cause industry restructuring due to LCD panel price declines and unstable investment sentiment."

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