[Click eStock] "OLED Boom... LG Display 2Q 'Surprise Earnings' Expected"

Both Medium and Large OLEDs Grow... Meaningful Profit Turnaround in 8 Years
LCD Also Maintains Strong Demand... Forecast for Record Annual Operating Profit

LG Display's next-generation OLED TV, selected as the People's Choice Best Technology Demonstration at this year's Society for Information Display (SID). (Provided by LG Display) [Image source=Yonhap News]

[Asia Economy Reporter Minwoo Lee] LG Display is expected to post a 'surprise performance' in the second quarter of this year. Both the large and small-to-medium OLED sectors are turning profitable simultaneously, indicating a continued trend of earnings growth.

On the 18th, KB Securities forecast that LG Display will record sales of 7.0174 trillion KRW and an operating profit of 708.8 billion KRW in the second quarter of this year. Compared to the same period last year, sales are expected to increase by 35.2%, and operating losses are estimated to turn into profits. In particular, operating profit is projected to increase by 35.5% compared to the previous quarter. This is analyzed as a 'surprise performance' exceeding the market consensus of 468 billion KRW by 51.5%.

The upward trend is expected to continue into the third quarter as well. Both the large OLED and small-to-medium OLED sectors are estimated to turn profitable simultaneously, reaching 804.5 billion KRW. This also exceeds the consensus of 611 billion KRW by 31.7%. Dongwon Kim, a researcher at KB Securities, explained, "The large OLED panel business, which started in 2013, is expected to achieve a meaningful profit turnaround for the first time in eight years from the second half of this year due to a double-digit average selling price (ASP) increase and volume growth." He added, "The small-to-medium OLED panel business, which began operations in 2017, is also expected to turn profitable for the first time in four years from the second half of this year due to a surge in orders for Apple's iPhone 13 panels."

Riding this trend, LG Display's operating profit for this year is projected to surpass the previous record high of 2.46 trillion KRW in 2017 and reach 2.61 trillion KRW. Therefore, KB Securities maintained its 'Buy' rating on LG Display and raised the target stock price by about 12% to 37,000 KRW. The closing price the previous day was 23,800 KRW.

Researcher Kim analyzed, "Although LG Display's stock price had been sluggish due to concerns over continued OLED losses in the second half, expectations of an LCD peak in the second quarter, and increased short selling, the entry into the OLED profitability phase and the rise in LCD panel prices in the second half due to increased demand for commercial PCs and large TV panels will prove these concerns unfounded." He added, "As new large OLED customers increase, the profits from the OLED business are expected to grow flexibly in the future."

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