[Click e-Stock] "LG Display Expected to Achieve Large-Scale Turnaround in Second Half... Target Price Raised"

Target Price Raised from 12,000 Won to 15,500 Won

On September 16, Hyundai Motor Securities raised its target price for LG Display from 12,000 won to 15,500 won, anticipating a large-scale turnaround in the second half of the year. The investment opinion remains 'Buy'.

Kim Jongbae, a researcher at Hyundai Motor Securities, explained, "We expect revenue growth across the entire OLED lineup, and profitability is also likely to improve due to innovations in cost structure. As a result, we expect LG Display to achieve a significant turnaround in the second half of the year." He added, "This improvement in performance is expected to be sustained, largely unaffected by seasonality, and the company is entering a period of structural growth."

LG Display's third-quarter results this year are expected to exceed market expectations. Kim stated, "On a consolidated basis, third-quarter sales are projected at 6.7389 trillion won, down 0.5% year-on-year, while operating profit is expected to reach 347 billion won, turning positive and surpassing the consensus (average of securities firms' forecasts). This is due to increased utilization rates across P-OLED (Plastic OLED), IT-OLED, and W-OLED (White OLED), which is driving both top-line growth and improved profitability."

P-OLED secured a lineup of one model in the first half and three models in the second half, thanks to lineup expansion. The company is expected to continue increasing its market share based on its competitiveness in low-temperature polycrystalline oxide (LTPO) thin-film transistors (TFT). Kim analyzed, "For this year, the annual utilization rate for P-OLED (based on 45K) is expected to be in the mid-80% range. With product launches diversified between the first and second halves, the annual utilization rate could rise further. Despite panel price reductions following the end of depreciation for 30K in the second half of last year, profitability could recover even more." He added, "It is also important to note the expansion of market share in higher-end lineups. Based on this, P-OLED is expected to grow by 8% year-on-year next year."

IT-OLED saw weak utilization rates in the second half of last year due to sluggish sales, but is expected to recover utilization rates thanks to increased market share and new product launches, with shipments projected to rise by 30% year-on-year. W-OLED sales are recovering due to strong OLED TV sales by new domestic customers and increased sales of gaming monitors. Profitability is also expected to improve from the second half of this year as some depreciation expenses are reduced.

There are opinions that LG Display has ample growth potential. Kim commented, "The reason why LG Display's price-to-book ratio (PBR) band was limited in the upper range over the past 10 years was due to weakened competitiveness and profitability of LCD panels, caused by China's mass production of low-cost 10G LCDs, as well as doubts about further growth." He continued, "However, with the sale of the Guangzhou LCD plant, earnings volatility caused by LCD TV panel prices has been reduced, and there is still ample growth potential based on P-OLED, IT-OLED, and W-OLED." He added, "The company is also making focused investments in technologies such as foldables, LTPO TFT, and CoE (Color filter on Encapsulation), which will enable it to respond sufficiently to future changes in panel technology."

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