Optimistic prospects for LG
March 20, 2017
South Korean conglomerate Eugene Investment & Securities, in a March 20th note to investors, says that it expects LG Display, the screen and panel division of LG Electronics, to report extremely buoyant Q1 results this week.
Eugene says it expects quarterly sales for LG Display to be down 9.4 per cent (to 7.193 billion Won), but despite this fall the report expects its operating profit to rise considerably, up 15.6 per cent (to 1.045 billion Won) compared with the same period last year.
Lee Jeong, an analyst with Eugene Investment, said: “The first-quarter sales revenue for LG Display tend to fall due to slow seasonal demand and the depreciation of the won. But its operating profit will likely rise thanks to the rise in display panels for TVs and computers while the increase in premium panel sales.”
Lee said recent downward pressure on LG’s share price was largely due to worries over whether the panel prices have peaked “and the rising burden to more investment in OLED production lines”.
Lee also anticipates growing profits and improved margins as a result of the consumers’ adoption of large panel displays and Ultra-HD screens. “Given the flexible capacities of the display panel suppliers and the trend toward larger LCD TV screens, the rising price trend would be stronger and longer than expected.”