[Click eStock] "LG Display Expected to Turn OLED Division Profitable from Second Half"

KB Securities "Target Price Raised from 24,000 KRW to 33,000 KRW"
Demand Exceeds Supply for Both OLED and LCD Panels

[Asia Economy Reporter Gong Byung-sun] LG Display's organic light-emitting diode (OLED) division is expected to turn profitable from the second half of this year. This outlook is based on the possibility of OLED TV panel prices rising from the second quarter and Samsung Electronics entering the OLED TV market, which is advantageous for LG Display, the sole supplier of large OLED panels.

On the 22nd, KB Securities raised the target price for LG Display from 24,000 won to 33,000 won, maintaining a 'buy' rating.

LG Display has been benefiting from the recent increase in demand for OLED TVs. The price gap between 55-inch liquid crystal display (LCD) and OLED TV panels narrowed from $440 (approximately 492,360 won) last year to $295, creating price competitiveness. As a result, OLED TV panel prices are expected to rise from the second quarter.

Samsung Electronics' entry into the OLED TV market starting next year is also positive news for LG Display. Dongwon Kim, a researcher at KB Securities, said, "A favorable business environment will be created for LG Display, which monopolizes large OLED panels. Accordingly, panel performance is expected to turn profitable in the second half of this year from an operating loss of 1 trillion won last year, and operating profit is projected to reach 688 billion won next year."

LCD TV prices are also expected to continue rising. This month, LCD TV panel prices approached $110, marking the highest level in five years. This is due to a price increase rate exceeding 5% since the third quarter of last year. Researcher Kim explained, "This month, the fulfillment rate of LCD panel purchases by leading overseas TV and PC companies is only 45%, and the shortage of key components is expected to continue until the end of this year. Since supply is insufficient compared to demand, the price increase trend will continue."

First-quarter earnings this year are expected to exceed market consensus. LG Display's first-quarter sales are projected at 6.9 trillion won, with operating profit at 518.9 billion won, surpassing the operating profit consensus of 488 billion won.