April 19, 2024

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[THE INVESTOR] LG Display’s loss is expanding, said Korea Investment and Securities on June 26, lowering the target price to 29,000 won (US$ from 37,000 won while maintaining a “buy” recommendation.

LCD panel prices are declining and LG Display was the only panel manufacturer to turn to red. Its loss will increase significantly in the second quarter. The prices have continued to fall and LG Display will remain in red in the third quarter. Its operating loss for the whole year will surpass 500 billion won, and it will be seriously short of cash to carry out its 9 trillion won investment planned for this year, said analyst Yoo Jong-woo.

The display maker’s borrowings as of the end of first quarter increased more than 1 trillion won from the end of last year to 6.7 trillion won, while its ability to generate cash is deteriorating fast, and concerns are growing over its long-term existence. The worsening financial health makes it hard to approach the company through valuation, and it should avert further weakening by stabilizing LCD panel prices, said the analyst. 

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