[Click eStock] "LG Display Expected to Recover OLED TV Panel Profits Starting Next Year"

Ecosystem Changes Expected with Samsung Electronics' Entry into OLED TV Market
KB Securities "LG Display, Target Price Maintained at 25,000 Won"

[Asia Economy Reporter Gong Byung-sun] LG Display is expected to recover profits next year in the first half, driven by Samsung Electronics' entry into the organic light-emitting diode (OLED) TV market. It is also linked as a beneficiary stock of the metaverse, related to Apple's expansion into the extended reality (XR) business.

On the 16th, KB Securities maintained its investment opinion of 'Buy' on LG Display and a target price of 25,000 won. The previous day's closing price was 20,700 won.

Samsung Electronics' entry into the OLED TV market positively influenced KB Securities' investment opinion and target price. Although the current global TV market landscape is centered on Chinese liquid crystal display (LCD) panels, Samsung Electronics is expected to lead an ecosystem change from the perspective of OLED TV standardization. Unlike the negative growth of the LCD-centered TV market, global premium TV demand continues with high growth centered on OLED TVs.

Accordingly, the OLED TV panel market is expected to be reorganized into a seller's market centered on LG Display. Dongwon Kim, a researcher at KB Securities, explained, "From next year, LG Display will have stronger negotiating power for OLED TV panel prices," adding, "It will enter a full-scale profit recovery phase for the first time in nine years since starting the OLED TV panel business in 2013." Meanwhile, LG Display's operating profit for TV panels in the fourth quarter of this year is estimated at 144.9 billion won, which is expected to offset profit declines due to falling LCD TV panel prices.

It is also expected to be related to the metaverse business. Apple plans to launch an XR headset, essential hardware for metaverse implementation, in the second half of next year. Apple's XR will be equipped with two or more high-resolution OLED displays. The OLED displays for the new XR device are expected to be entrusted to LG Display, a proven iPhone parts supplier. In addition to Apple, companies such as Microsoft, Meta (Facebook), Google, and Sony are expected to equip OLEDs as they release various metaverse XR devices.