[Click eStock] "LG Display, Value Dilution per Share Due to Paid-in Capital Increase... Investment Opinion and Target Price Down"

Shinhan Investment Corp. downgraded its investment opinion on LG Display from 'Buy' to 'Trading Buy' on the 25th, citing inevitable dilution of per-share value due to a rights offering, and lowered the target price from 17,000 KRW to 15,000 KRW.

Namgung Hyun, Senior Researcher at Shinhan Investment Corp., stated, "The dilution of per-share value due to the rights offering announced on the 18th of last month is unavoidable," adding, "The 2024 book value per share (BPS) is expected to decline by 28% due to the newly issued shares (140 million shares)."

LG Display recorded sales of 7.4 trillion KRW in the fourth quarter of last year, a 54.6% increase from the previous quarter, and turned an operating profit of 100 billion KRW. Researcher Namgung analyzed, "Supported by seasonal demand, shipments of medium-to-large panels (TV and IT products) also increased somewhat, with shipment area rising 17% to 5.6 million square meters," and added, "Sales of small panels (mobile and others) reached 3.3 trillion KRW, a 135.7% increase from the previous quarter, leading to the turnaround to operating profit. Accordingly, the average selling price (ASP) in the fourth quarter was $1,064, up 32%."

The annual performance for this year is expected to show only a reduction in losses. Researcher Namgung said, "This year's sales are expected to increase by 16.1% year-on-year to 24.8 trillion KRW, with an operating loss of 1 trillion KRW, reflecting only a reduction in the deficit," and added, "In the first half, operating losses are expected due to the off-season and LCD panel price declines, while in the second half, operating profit is expected due to seasonal peak demand, resulting in a bottom-heavy trend."

Although shipment volumes of major applications are expected to turn to growth this year, it is analyzed that significant growth is unlikely. Researcher Namgung explained, "However, despite the weak recovery in front-end demand, the expansion of IT OLED penetration, diversification of OLED and LCD TV customers, and mobile production capacity expansion are expected to improve operating losses to around 1.5 trillion KRW," and added, "Automotive panels are also expected to strengthen business competitiveness based on technological superiority."

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