by Song Hwajung
Published 25 Jan.2024 09:45(KST)
Updated 25 Jan.2024 14:55(KST)
LG Display is showing a decline of over 3% in the early trading session due to concerns over per-share value dilution from the rights offering and continued deficit forecasts.
As of 9:41 a.m. on the 25th, LG Display is trading at 12,240 KRW, down 460 KRW (3.62%) from the previous day.
On this day, securities firms have consecutively downgraded their investment opinions and target prices due to concerns over per-share value dilution from the rights offering and continued deficit forecasts, which is interpreted as leading to the stock price weakness.
Shinhan Investment Corp. stated that per-share value dilution is inevitable due to the rights offering for LG Display, lowering its investment opinion from 'Buy' to 'Short-term Buy (Trading Buy)' and reducing the target price from 17,000 KRW to 15,000 KRW. Namgung Hyun, Senior Researcher at Shinhan Investment Corp., said, "Per-share value dilution due to the rights offering announced on the 18th of last month is inevitable," adding, "The 2024 book value per share (BPS) is expected to fall by 28% due to the newly issued shares (140 million shares)."
Kiwoom Securities lowered LG Display's investment opinion from 'Buy' to 'Outperform' and also cut the target price from 19,000 KRW to 16,000 KRW. Kim Sowon, a researcher at Kiwoom Securities, said, "LG Display's performance this year is expected to improve significantly compared to the previous year, supported by expanded OLED panel shipments, but operating losses will continue," adding, "Considering the operating loss turnaround in the first half of this year and the lack of short-term performance momentum, although the rights offering is expected to strengthen OLED business competitiveness and financial stability, dilution of equity value is inevitable. Therefore, the stock price growth momentum is expected to begin from the second quarter when performance improvement becomes more pronounced and the OLED iPad launch is anticipated."
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