Analysts offer rosy H2 outlook for LG Display

LG Display's headquarters in Yeouido, western Seoul (Herald DB)

LG Display is expected to get out of the red in the latter half of this year, largely buoyed by its increased panel shipments for Apple's new iPhones that debut next month, according to industry sources on Tuesday.

Local researchers painted a rosy outlook for LG Display, which has begun stable production of the first batch of the panels for the new iPhone 16 series. The Korean panel maker is said to be responsible for almost 40 percent of the total panel supplies for the new iPhones.

According to market intelligence firm FnGuide, LG Display’s operating profit is expected to turn into a surplus of 50.5 billion won ($36.8 million) in the third quarter and further expand to 363.6 billion won in the fourth quarter.

“Unlike last year, (LG Display’s) sales are expected to increase by 19 percent in the second half due to the noticeable mobile sector’s growth,” said Namgung Hyon, an analyst at Shinhan Securities.

KB Securities researcher Kim Dong-won forecast that LG Display will likely achieve its best performance in 14 quarters in the fourth quarter, buoyed by concentrated shipments of OLED panels during the period.

“An earnings surprise is expected in the fourth quarter due to an increased operating rate driven by higher OLED panel shipments,” Kim of KB Securities said. “Small and medium-sized OLED panel shipments will likely increase by 83 percent in the second half from the January-June period, thanks to Apple products."

The panel maker had recorded losses for six consecutive quarters from the second quarter of 2022 to the third quarter of last year, before turning a profit in the fourth quarter of last year. After slipping back into a deficit in the first quarter of this year, however, the company has been in the red for two consecutive quarters.

Apple is targeting a total of 120 million OLED iPhone panels this year, up 30 percent from last year. LG Display is expected to supply about 37.5 percent, or 45 million of the supply, while Samsung Display is responsible for producing the rest.

The Korean panel maker has started producing OLED panels for the premium line of the upcoming iPhone 16 series -- iPhone 16 Pro and iPhone 16 Pro Max -- at its plant in Paju, Gyeonggi Province, ahead of their global launch in September, sources said.

Meanwhile, LG Display has been expanding its OLED business. Increasing sales of OLED panels helped the company downsize its operating loss in the April-June period to 93.7 billion won from 881.5 billion won a year ago.

By Jie Ye-eun(yeeun@heraldcorp.com)