LG Display: Improved Results Offset By Lingering Uncertainty

Core Viewpoint - LG Display (LPL) reported mixed results in its Q2 2024 earnings, showing improvements in revenue and EBITDA, but the stock declined due to concerns about future demand and profitability [19]. Financial Performance - LPL reported Q2 2024 revenue of KRW 6,708 billion (approximately $4.85 billion), a 27.7% increase QoQ and 41.5% YoY [5]. - The company experienced an operating loss of KRW 94 billion (about $68 million), significantly better than the expected loss, which was three times larger [5]. - EBITDA grew to KRW 1,287 billion (approximately $0.93 billion), up 58.9% QoQ and 890% YoY [5]. - Despite improvements, LPL ended the quarter with a net loss of KRW 471 billion (approximately $0.34 billion), although this was an improvement from a loss of KRW 699 billion a year ago [5]. Market Trends - The stock has been on a downward trend since its peak in April 2021, reaching a multi-year low of $3.45 on May 29, 2024 [4]. - Area shipments increased by 23% QoQ and 37% YoY to 6.5 million square meters, with OLED shipments accounting for 52% of revenue [11]. - The company is shifting focus from LCD to OLED displays, although competition from Chinese manufacturers is increasing in the OLED market [8]. Future Outlook - Q3 2024 guidance suggests area shipments will increase by mid-single digits QoQ, with flat average selling prices (ASP) [6][12]. - LPL is expected to post a profit in Q4 2024, but this could be lower than anticipated due to tough comparisons from Q4 2023 [8][20]. - The impact of the upcoming Olympic Games in 2024 may have temporarily boosted H1 2024 results, but this effect is not expected to continue into H2 2024 [8]. Debt and Valuation - LPL's total debt was KRW 16,159 billion (approximately $11.68 billion) in Q2 2024, down from KRW 17,023 billion in Q1 2024 [7]. - The company has a book value of KRW 9,180 billion (approximately $6.64 billion) and is currently valued at 0.23 times sales, indicating low market confidence [13]. - LPL's stock trades below its book value, with a price-to-book ratio of 0.62x, reflecting ongoing concerns about profitability [13].