[Click eStock] "LGD, Expecting Further Growth Despite Stock Price Drop Due to Paid-in Capital Increase"

IBK Investment & Securities stated on the 19th that LG Display is expected to experience a stock price decline following its decision to conduct a rights offering, but its growth potential is anticipated to continue.

LG Display decided on a rights offering worth 1.3579 trillion KRW at a board meeting the previous day. The issue price is 9,550 KRW, and approximately 0.32 new shares will be allocated per existing share. The subscription period is from March 6 to 7 next year, with the payment date on March 14 next year.

Despite ongoing speculation about a rights offering, the company had previously stated it would overcome challenges through alternatives such as loans from LG Electronics and pre-investments from overseas customers. LG Display borrowed 1 trillion KRW long-term from LG Electronics in March. Although there were expectations for policy funds, nothing has been confirmed. As the need for additional funding increased due to higher investment and operating funds relative to EBITDA, the company is interpreted to have proceeded with the rights offering. The funds raised through the rights offering are estimated to be used for facilities (415.9 billion KRW), operations (548.3 billion KRW), and debt repayment (393.6 billion KRW).

Kim Unho, a researcher at IBK Investment & Securities, said, "A stock price decline due to the rights offering is natural, but the expectation for additional growth through securing funds remains valid. Considering the industry outlook improvement in 2024, the current stock price is judged to be attractive."

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