[Click e Stocks] "LG Display, Earnings Improvement to Accelerate from 4Q"
NH Investment & Securities forecasted on the 21st that LG Display's profit improvement trend will begin in earnest from the fourth quarter of this year, maintaining a 'Buy' investment rating and a target price of 18,000 KRW.
Lee Gyu-ha, a researcher at NH Investment & Securities, stated, "Short-term earnings are expected to fall short of market expectations due to delays in smartphone panel supply to North American clients and continued sluggish sales of organic light-emitting diode (OLED) TVs. However, from the fourth quarter, with the recently completed panel approvals, normal shipments of mobile OLED panels are expected, increasing the likelihood of profit achievement."
Mobile OLED panel shipments are expected to expand significantly starting in the fourth quarter. The researcher analyzed, "In particular, the relatively strong demand for high-end smartphones, which LG Display is responsible for, is a positive factor. Furthermore, in the first half of next year, diversification of OLED TV clients and new shipments of OLED panels for tablets are expected, continuing the profit recovery trend." From the second half of next year, depreciation for the mobile OLED E6 Line 1 will end, followed sequentially by the end of E6 Line 2 and the Guangzhou OLED TV line, which is expected to improve performance due to reduced depreciation expenses.
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Third-quarter earnings are expected to fall short of market expectations. The researcher explained, "The operating loss for the third quarter is expected to be 741.5 billion KRW, below market expectations, mainly due to the slowdown in mobile OLED shipments caused by delays in approval from North American clients." He added, "However, in the fourth quarter, there is a high possibility of a turnaround with the expansion of smartphone OLED panel shipments. Considering the industry recovery and valuation attractiveness, we recommend buying."
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