[Click eStock] "LG Display's Financial Improvement Clear After 'Sale of Guangzhou Factory in China'"

On the 27th, Samsung Securities maintained its buy rating and target price of 15,000 won for LG Display (LGD), stating that "the inflow of approximately 2 trillion won in cash during the first quarter of next year will clearly improve the financial structure."

On the same day, Samsung Securities researcher Jang Jeong-hoon said, "LGD announced yesterday that it signed a contract worth about 2 trillion won to transfer its stake in the Guangzhou large liquid crystal display (LCD) panel and module factory to China Star Optoelectronics Technology (CSOT) in China."

The sale includes 51% of LGD CA (China) corporation shares held by LGD headquarters, 8.5% of LGD CA shares held by LGDGT (Guangzhou Trading) corporation, and 100% of LGD GZ (Guangzhou) corporation shares held by LGD headquarters. The total sale price amounts to 2.0256 trillion won.

The cash inflow is expected to occur in the first quarter of next year. Researcher Jang stated, "Following government approval, the final sale process will be completed during the first quarter of next year," and added, "The visible improvement in the financial structure will have a positive impact on the stock price."

He also said, "If there are no other variables following the final contract signing, 2 trillion won from the sale will be received in cash during the first quarter of next year. This amount corresponds to 23% compared to last year's equity capital of 8.7 trillion won," adding, "It is difficult to estimate the book value of the assets being sold, so it is hard to assess the disposal profit or loss, but after the depreciation of two E6 lines ends within this year, the improvement in the financial structure will become clear in the first quarter of next year."