[Click eStock] LG Display, Excessive Stock Price Decline... Profitability Improving

[Asia Economy Reporter Lee Seon-ae] Yuanta Securities announced on the 29th that it maintains a Buy rating and a target price of 31,000 KRW for LG Display.

Researcher Kim Kwang-jin of Yuanta Securities stated, "The stock price has fallen 15% since April 27, following the stock prices of panel companies in Greater China due to concerns over a peak-out in LCD prices in the second half of the year, which is an excessive situation," adding, "The current stock price is at a price-to-book ratio (PBR) of 0.6 times based on this year, indicating an expanded valuation appeal." He continued, "It is important to note that the company's identity lies in its OLED business," and added, "If the performance improvement in the OLED segment is confirmed in the second half, we expect a stock price increase due to a multiple re-rating."

A significant profitability improvement is expected with the increase in OLED shipments in the second half. POLED supply for new flagship models from U.S. clients is expected to begin in earnest. As the supply models expand from one model last year to two models this year, shipments are expected to reach approximately 30 million units. Profit contribution is anticipated as profitability improves with increased utilization rates.

WOLED shipments in the second half are expected to exceed 4 million units. It is positive that a new mid-sized market under 42 inches, including gaming use, is emerging alongside the existing premium large-sized TV market of 55 inches and above. This indicates an expansion of WOLED’s applicable segments. The sales proportion of mid-sized WOLED is expected to expand to nearly 20% this year, and with increased utilization rates, the WOLED segment is expected to enter operating profitability.

It is judged that this can be achieved.