[Click eStock] "LG Display to Return to Profit After 6 Quarters... Target Price Up"

[Asia Economy Reporter Eunmo Koo] Hanwha Investment & Securities forecasted that LG Display will achieve an operating profit turnaround after six quarters. The investment rating was maintained at 'Buy,' and the target stock price was raised to 19,000 KRW.

LG Display's performance is improving faster than expected. Researcher Soonhak Lee of Hanwha Investment & Securities stated in a report on the 8th, "Although an operating profit turnaround was initially expected in the fourth quarter, it is now anticipated to occur one quarter earlier," estimating third-quarter sales at 6.8 trillion KRW and operating profit at 34.7 billion KRW.

Lee explained, "The production increase at the Guangzhou OLED (Organic Light Emitting Diode) plant in China is progressing smoothly and has been operating at full capacity since September, and OLED TV demand is also improving due to COVID-19." He added, "As the overall TV market improves, the rise in LCD (Liquid Crystal Display) panel prices is greater than expected, and P-OLED supply to North American clients is proceeding as planned, contributing to a reduction in operating losses."

While the panel industry faced many negative impacts during the early stages of COVID-19, positive changes have been emerging in the second half of the year. Lee assessed, "First, TV demand has generally improved, especially for high-end products such as large LCD TVs and OLED TVs. The upward trend in LCD panel prices is expected to continue at least until October, significantly contributing to short-term performance improvement." He also analyzed, "Demand for new products from North American customers is expected to increase by 10-15% compared to initial estimates, making it highly likely that LG Display will record operating profits in the fourth quarter as well."

The investment rating was maintained at 'Buy,' and the target stock price was raised to 19,000 KRW. Lee stated, "With signs of performance improvement appearing, the upward trend in stock prices is expected to continue for the time being. However, considering that Taiwanese LCD companies' valuations remain at a price-to-book ratio (PBR) of around 0.5, a 0.6 multiple was applied." He added, "We plan to review further target price increases in consideration of the profit contribution speed of the Guangzhou OLED plant and whether North American clients request additional expansions."

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