[THE INVESTOR] LG Display’s earnings prospects from small and medium-sized OLEDs are unclear, said KB Investment and Securities on Oct. 17, lowering the target price to 24,000 won (US$21.35) from 28,000 won.
It will begin to operate a new line for smaller polymer light-emitting diodes at its Paju factory from the fourth quarter. This is a strategic move to meet the demand from its major client in North America and to tackle foldable smartphone market that is expected to expand from 2020. Uncertainties remain, however, over the possibility of earnings improvement, depending on the development of the new line’s yield as well as annual depreciation cost that could reach 500 billion won, said analyst Kim Dong-won.
The display maker will invest in converting its eighth-generation LCD line to produce OLEDs from next year. OLEDs will fast become the main source of its revenue, and its stock price is unlikely to decline further, forecast Kim maintaining a “buy” recommendation.
By Hwang You-mee (email@example.com)