[Click eStock] "LG Display, Confirmation of LCD Cycle Bottom to Catalyze Stock Price Rise"

[Asia Economy Reporter Oh Ju-yeon] KB Securities analyzed on the 21st that LG Display's investment points are confirming the bottom of the LCD cycle in the first quarter, the start of normalization of large OLED (WOLED) in the second quarter, and profitability improvement due to 100% operating rate of small and medium OLED (P. OLED) in the second half of the year. Along with this, the stock price was expected to have an upside potential of 23.4% as of the 20th.

Researcher Kim Dong-won explained, "Considering that the display industry is a market with high volatility in price and supply-demand, confirming the bottom of the LCD cycle due to future price increases is expected to be a catalyst for stock price rise."

Researcher Kim mentioned, "According to WitsView, the February LCD TV panel price rose by an average of 3% month-on-month due to production disruptions in China caused by the novel coronavirus (COVID-19), successfully reversing the price trend upward for all products for the first time in 40 months since November 2016," adding, "The February LCD price increase is expected to have a positive impact on LGD's performance improvement." He also diagnosed that if LCD production disruptions continue after March, the global LCD supply-demand will face a shortage of supply.

Researcher Kim estimated, "The new large OLED line in Guangzhou, expected to be fully operational from the second quarter, will apply MMG technology, and despite delayed operation compared to the original plan, OLED TV panel shipments this year will increase by 82% year-on-year to 6 million units." In particular, the small and medium OLED lines (E6-1, 2) are expected to start supplying new smartphones of North American strategic customers from the third quarter, with shipments of 24 million small and medium OLED panels (an average of 4 million units per month) expected in the second half, achieving a 100% operating rate."

Accordingly, the investment opinion was maintained as 'Buy', and the target stock price was maintained at 19,000 won.