[Click eStock] "LGD Expected to Return to Profit in the Second Half of This Year"

[Asia Economy Reporter Son Sun-hee] Kiwoom Securities maintained its investment opinion of 'Buy' and target price of 18,000 KRW for LG Display, which is currently operating at an operating loss, stating that performance improvement (turnaround) is expected from the second half of this year.

LG Display's consolidated sales for the fourth quarter of last year are estimated to be 7.7 trillion KRW, down 12% from the same period last year. Operating profit is expected to turn to a loss of -756.1 billion KRW, falling short of market expectations.

The shipment area (m²) is expected to increase by 13% compared to the previous quarter, supported by the year-end peak season effect for TV panels and expanded shipments of plastic organic light-emitting diode (POLED) panels. However, the average selling price per area (ASP/m²) is forecast to shrink by 2%, as the decline in LCD panel prices offsets the improved mix effect of POLED panels.

In particular, despite a rebound in some LCD TV panel prices, the decline in LCD IT panel prices is expected to have a greater impact, leading to a turnaround to losses in the IT (monitor, notebook, tablet) panel division, which has maintained operating profits for several years.

Operating losses are expected to continue in the first half of this year due to seasonal off-season effects and weak LCD IT panel prices. However, in the second half, significant performance improvement is anticipated, supported by increased market share in next-generation iPhones, downsizing of the LCD TV division, and seasonal peak effects.

Kim So-won, a researcher at Kiwoom Securities, said, "LG Display is currently going through its worst period, compounded by the IT panel division turning to losses," but added, "The proportion of the OLED division is expected to expand rapidly in the future, and we recommend increasing exposure with a long-term perspective, anticipating a revaluation of OLED companies starting in the second half."