LG Display, Stock Price Stalls... Securities Firms Sing 'Go' in Unison

13 Securities Firms Simultaneously Raise Target Prices on 29th
1Q Strong Earnings with Clear Improvement Expected in Second Half
Concerns Over High Short Selling Ratio... Ranked 10th in KOSPI Overall
Concerns Raised About Potential Difficulty in Securing Business Competitiveness

[Asia Economy Reporter Minwoo Lee] While LG Display's stock price is retreating, securities firms have unanimously raised their target prices. This is based on the expectation that earnings will clearly improve in the second half of the year. However, there are concerns that caution is needed due to the high proportion of short-selling balances.

As of 10:50 a.m. on the 30th, LG Display's stock price recorded 24,350 KRW, down 3.56% from the previous day. It rose from the closing price of 24,900 KRW on the 21st to an intraday high of 27,600 KRW on the 26th, but fell about 12% in three trading days, giving back the gains. Nevertheless, the securities industry is presenting a "rosy outlook." Reports from 14 securities firms were released simultaneously the day before, with 13 raising their target prices. Hi Investment & Securities set a target price as high as 36,000 KRW. Hana Financial Investment also raised its target price by 29.6% to 35,000 KRW.

The reason is earnings. After posting strong results in the first quarter of this year, earnings are expected to improve significantly with the recovery of the industry outlook. LG Display recorded consolidated sales of 6.8828 trillion KRW and operating profit of 523 billion KRW in the first quarter of this year. Compared to the same period last year, sales increased by 45.69%, and operating loss turned into profit. These results exceeded market expectations by 0.75% and 5.64%, respectively. Lee Soon-hak, a researcher at Hanwha Investment & Securities, explained, "With the continuation of the untact (non-face-to-face) trend, all business sectors posted strong results," adding, "In the second half, LCD, large OLED, and P-OLED are all expected to improve, showing earnings momentum."

Nevertheless, voices of concern have emerged. With short-selling resuming from the 3rd of next month, LG Display could become a concentrated target. According to the Korea Exchange, as of the 27th, LG Display's short-selling balance ratio was 1.38%, ranking 10th overall in the KOSPI. Except for the 5th of this month, short-selling transactions occurred on all trading days. Currently, 22 entities including domestic securities firms and foreign investment banks (IBs) can conduct short-selling as market makers. Korea Investment & Securities even excluded LG Display, which has a high short-selling balance ratio, from its recommended stock list for next month.

There are also doubts about the earnings themselves. NH Investment & Securities lowered its investment opinion from "Buy" to "Neutral (HOLD)." This is based on the judgment that LG Display's market position could be shaken regardless of industry improvement. Ko Jung-woo, a researcher at NH Investment & Securities, pointed out, "It is somewhat difficult to expect LG Display to strengthen its business competitiveness due to the weakening position of the LCD business, intensified competition in the small and medium-sized OLED business, and expected damage to the large OLED business due to TV manufacturers' strengthened miniLED product strategies," adding, "In particular, after resolving supply shortages of certain LCD components, the expansion of LCD shipments from China and productivity improvements of Chinese small and medium-sized OLED companies will also pose threats."