"LG Display's Performance Improvement Trend Expected to Continue Through Next Year"

Shinhan Financial Investment Report
LG Display Expected to Return to Profit After 7 Quarters

[Asia Economy Reporter Minji Lee] LG Display is expected to return to profitability after seven quarters due to the popularization of OLED TVs and the price increase of LCD TV open cells, and opinions suggest that the performance improvement trend will continue next year as well.

According to Shinhan Financial Investment on the 10th, LG Display's third-quarter sales are estimated to grow 25.6% compared to the same period last year, reaching 6.667 trillion KRW. Operating profit is expected to turn positive at 102 billion KRW. This will mark the first operating profit in seven quarters.

Soh Hyun-chul, a researcher at Shinhan Financial Investment, said, "This is because the prices of 32-inch and 55-inch LCD TV open cells rose by 24% and 15% respectively compared to the previous quarter," adding, "The POLED operating loss has decreased, and the Guangzhou OLED TV line has normalized its operations."

Fourth-quarter sales are expected to increase by 8.2% from the previous quarter to 7.211 trillion KRW. Operating profit is also expected to rise 211% to 318 billion KRW. This is because the strong price trend of LCD TV open cells is expected to continue, and the OLED TV business segment is anticipated to turn profitable. This year's operating loss is expected to shrink by 909.3 billion KRW compared to last year, to 450.1 billion KRW.

Next year, the performance improvement trend is expected to continue with the full normalization of the POLED TV business. Operating profit is projected to reach 883.1 billion KRW. Samsung Display plans to cease LCD panel production by the end of this year. As a result, despite the seasonal low in the first half of next year, the strong price trend of LCD TV panels is expected to persist.

Researcher Soh said, "Although the POLED business recorded large operating losses over the past two years, it has been normalizing since the second half of this year, and operating profit is expected to turn positive next year," and explained, "With the full operation of the Guangzhou OLED TV line next year, the OLED TV business operating profit is projected to reach 341 billion KRW."

He added, "If the strong demand for large TVs in advanced markets continues until the end of the year, sustaining the strong price trend of LCD TV open cells, the stock price could rise further," and maintained a buy rating with a target price of 20,000 KRW.