[Click eStock] LG Display, LCD Profit Decline Expected to Ease

[Asia Economy Reporter Junho Hwang] Korea Investment & Securities maintained the target price for LG Display at 33,000 KRW on the 13th. However, they issued a buy recommendation, noting that the sharp decline in LCD profits due to falling panel prices, which had been an obstacle to stock price growth, is easing, and the OLED business, which had been operating at a loss, has entered a profitable phase.

LG Display's operating profit for the fourth quarter of last year is expected to be 620.1 billion KRW, in line with consensus. This is expected to be better than the previous estimate (558.1 billion KRW), as shipments of IT panels (laptops, monitors) were more robust than expected and the price decline was smaller.

OLED panel shipments are also expected to be favorable. OLED TV panels (24 million units) are estimated to have increased by 36% compared to the previous quarter, and mobile OLED panels (18 million units) by 73%. With full operation of the OLED line in the fourth quarter of last year, OLED operating profit is expected to be 200 billion KRW (turning to profit).

LCD operating profit is expected to decrease by 24% compared to the previous quarter, but the decline is expected to be smaller than anticipated. This is because the sharp price drop of LCD TV panels (down 34% from the previous quarter) and shipment decrease have been offset by the sales proportion dropping to 10%. The increase in OLED profits is expected to offset the decrease in LCD profits, resulting in a 17% increase in operating profit in the fourth quarter compared to the previous quarter.

Jungwhan Kim, a researcher at Korea Investment & Securities, stated, "LG Display plans to transform its TV panel production lines into high-margin IT panels, turning the LCD business into a structure that does not incur losses," and added, "IT panel shipments are expected to remain strong in the first half, leading to an upward revision of LCD profit estimates."

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