[Click eStock] "LG Display, Crisis Bigger Than Opportunity"…Target Price Downward Revised

[Asia Economy Reporter Ji Yeon-jin] Cape Investment & Securities announced on the 24th that it is lowering the target price for LG Display to 25,000 KRW, judging that the risk of LCD TV panel price declines in the second half outweighs the opportunity of improved OLED TV profitability. However, it maintained a buy rating, stating that the company is in the final stages of OLED transition.

LG Display's third-quarter earnings are expected to fall short of market forecasts. LCD TV panel prices began to decline starting last month. Beginning with 32-inch panels in July, price drops have been observed across all sizes, including extra-large panels, this month.

Park Sung-soon, a researcher at Cape Investment & Securities, stated, "POLED (Plastic OLED) volumes are expected to fall short of initial estimates due to supply chain issues with components, leading us to revise downward the third-quarter panel shipment and price forecasts."

Supply of LCD panels from Chinese panel manufacturers is increasing. In particular, the surge in supply of small and medium-sized panels such as 32-inch panels from China has caused a sharp price decline in 32-inch panels, which has also affected prices of larger sizes. Although IT panel prices have not yet declined, the demand slowdown for PCs and laptops, which benefited from COVID-19, is expected to exert downward pressure on panel prices.