LG Display Target Price Raised... "Expecting Earnings Turnaround"

Improved LCD Selling Prices and Increased OLED Utilization Rate
Shin Geum Investment Sets Target Price at 25,000 Won

[Asia Economy Reporter Minji Lee] LG Display is expected to achieve a turnaround in performance this year due to rising LCD panel prices and increased operating rates of large OLED lines. Accordingly, securities firms are continuously raising their target stock prices.

According to the Korea Exchange on the 3rd, foreign and institutional investors purchased LG Display shares worth 29 billion KRW and 43.5 billion KRW respectively from the 1st to the 31st of last month. LG Display ranked among the top net purchase stocks, and its stock price surged about 21% during this period.

The expectation that profits will significantly increase due to rising LCD TV panel prices appears to have grown. As the LCD TV panel price, a key variable for securing profitability, rises, operating profit is expected to improve even in the first half of the year, which is usually considered an off-season. The upward trend in LCD panel prices is also expected to continue into the first quarter. LCD sales, centered on IT and TV, are showing strong performance, and due to the blackout at Japan's NEG, shortages of glass substrates and key components such as driver ICs and PMICs are expected to tighten the supply and demand of LCD panels.

The operation of new large organic light-emitting diode (OLED) lines, which could increase volume by up to 80%, is also enhancing investment attractiveness. Since the third quarter of last year, large OLEDs have been mass-produced in Guangzhou, China, and as a result, the volume this year is predicted to increase significantly compared to last year.

There is also anticipation for increased shipments of mobile OLEDs, which have higher selling prices. Kim Young-woo, a researcher at SK Securities, said, “Apple’s iPhone 12, the largest customer of plastic OLED, is showing strong sales and is estimated to grow about 18-20% year-on-year this year,” but added, “However, the possibility of China’s BOE entering Apple’s supply chain is a concern.”

Accordingly, annual performance forecasts are also being revised upward. According to financial information provider FnGuide, securities firms expect LG Display to earn an operating profit of 612 billion KRW this year. This is a significant improvement compared to last year’s operating profit forecast (-471.8 billion KRW). Specifically, Hanwha Investment & Securities raised its earnings estimate for LG Display by 71% to 705.5 billion KRW, and Shinhan Financial Investment raised its estimate by 27% to 1.003 trillion KRW from the previous estimate of 788 billion KRW.

Target stock prices have also been revised upward. The highest target price was proposed by IBK Investment & Securities, which raised it by 13% to 25,000 KRW. Hanwha Investment & Securities raised its target price by 21% to 23,000 KRW, and Shinhan Financial Investment raised it by 5% to 21,000 KRW. Kim Un-ho, a researcher at IBK Investment & Securities, explained, “The operating profit for the fourth quarter of last year is expected to significantly exceed market expectations,” adding, “Not only the rising LCD panel prices but also the operation of new large OLED lines have laid the foundation for external growth.”

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