[Click eStock] "LG Display: Performance Improving, Valuation at Historic Low"

On July 25, Shinhan Investment Corp. analyzed that LG Display is showing both an improvement in performance and a historically low valuation.

In the second quarter of this year, LG Display recorded sales of 5.6 trillion won, an operating loss of 116 billion won, and a net profit of 89.07 billion won. Operating profit turned to a loss, while net profit turned positive. The decline in performance was due to several independent factors: a drop in the exchange rate, a decrease in TV sales following the sale of the LCD TV fab, and the entry into the off-season for mobile products. However, the company’s fundamentals are considered to have improved thanks to business structure advancement and cost innovation. Additionally, the turnaround to net profit as a result of receiving funds from the fab sale is also seen as positive.

Namgoong Hyun, a researcher at Shinhan Investment Corp., said, “For the third quarter, sales are expected to reach 6.6 trillion won (+18.4%), and operating profit is expected to turn positive at 232.8 billion won, which is in line with the consensus (244.3 billion won).” He also judged, “Growth in the mobile sector (+69.9%) will be particularly notable, driven by the launch of new products by North American clients.”

He analyzed, “There are uncertainties in demand due to tariff uncertainties and the possibility of increased market share by Chinese panel makers. However, the possibility of solid shipment growth is also rising, centered on expanded mobile production capacity and technological competitiveness.”

He added, “In the second half, robust shipments centered on mobile seasonality and technological competitiveness, cost reductions from the end of large-size OLED depreciation, and product mix improvements focused on high-end IT LCDs are driving continued business efficiency for 2025?2026. Although investor expectations remain low due to losses recorded from 2022 to 2024, as the company enters a visible turnaround to profitability, the stock price is expected to trend upward.”

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