April 25, 2024

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[THE INVESTOR] LG Display will turn to red this year due to oversupply of LCDs, said Eugene Investment and Securities on June 22, maintaining a “hold” recommendation and lowering the target price to 24,000 won (US$21.63) from 29,000 won.

The decline in LCD TV panel prices is deepening, and if it continues as expected LG Display’s revenue in the second quarter will come in at 5.4 trillion won and operating loss will reach 250 billion won. Unless the LCD sector, which contributed 90 percent of its revenue last year, rebounds and stabilizes, the company will not be able recover. It is estimated to suffer 711 billion won operating loss and 559 billion won net loss for the whole year with 23 trillion won revenue, said analyst Lee Seung-woo.

If it carries on the LCD investment plans in China, it will have a hard time coming out of the red next year. There are a number of matters to solve including oversupply of LCD and burden of investment in facilities as well as depreciation costs and rising interest rate, said Lee advising investors to maintain a conservative approach for the time being. 

By Hwang You-mee (glamazon@heraldcorp.com)