Hyundai Motor Securities predicted on the 21st that LG Display will maintain a good earnings trend starting this year. It maintained a target stock price of 12,000 won and an investment opinion of "buy." The closing price for LG Display on the previous trading day was 9,710 won.
Hyundai Motor Securities estimated that LG Display's operating loss for the first quarter (January to March) of this year would be 44 billion won. This exceeds the previous operating profit and loss estimate, with Kim Jong-bae, a researcher at Hyundai Motor Securities, explaining that "the increase in the share of new products in P-OLED (plastic OLED) has improved the mix (the ratio of product composition) and is continuing to be favorable due to sustained exchange rates."
Hyundai Motor Securities expected that profitability and performance would improve for LG Display. Kim noted, "As depreciation on the QLED panel line ends and personnel adjustments reduce selling, general and administrative expenses, profitability will improve. Additionally, as OLED panel shipments increase, we expect performance to improve."
Kim noted, "Although LG Display had low utilization rates in the first half of the year, it is steadily increasing its annual utilization rate by securing mid-range and low-cost panel lines," adding that "expanding its market share in new panel products for set customers compared to existing old models is contributing to profitability improvement, coinciding with the completion of depreciation for some lines in the second half of last year."
He added, "In particular, as the mix improves and P-OLED shipments continue to rise, this is a clear growth point that can rebut skepticism about the lack of new investments in growth."
He predicted that LG Display would make a reasonable profit this year. Kim noted, "The direction of LG Display regarding the annual earnings turnaround and the sale of the Guangzhou LCD production plant is clear and proceeding smoothly, and considering that expenses have decreased along with the growth of revenue and profitability, the trend for LG Display is improving, and this trend has not been sufficiently reflected in the stock price yet." He then suggested a strategy to expand its share.