Financial Data and Key Metrics Changes - Revenue for Q4 2025 rose slightly quarter-on-quarter (QOQ) to 7.2008 trillion KRW, driven by solid panel shipments for TVs and notebook PCs [10] - Operating profit declined QOQ to 168.5 billion KRW due to lower shipments of certain small and medium OLED models and one-off costs related to strengthening the company's profit structure [12][14] - Net loss was 351.2 billion KRW, primarily due to foreign currency translation losses [18] - EBITDA in Q4 was 1.162 trillion KRW, with an EBITDA margin of 16% [20] Business Line Data and Key Metrics Changes - Shipment area for TV and notebook PC panels grew QOQ, while shipments for monitor and tablet panels declined, resulting in a total shipment area increase to 4.0 million square meters [25] - ASP per square meter for OLED panels was $1,297, down 5% QOQ but up 49% year-on-year (YOY) [26] - OLED products accounted for 65% of total revenue in Q4, unchanged QOQ and up 5 percentage points YOY [38] Market Data and Key Metrics Changes - Revenue share from mobile and others accounted for 40% of total revenue, up 1 percentage point QOQ, while IT revenue share decreased to 36% [30][34] - TV revenue share rose slightly by 1 percentage point, while auto revenue share decreased to 7% [36] Company Strategy and Development Direction - The company aims to solidify its OLED-centric business structure, having terminated large LCD operations and focusing on high-margin products [61] - Future strategies include expanding panel shipments in small mobile, responding to high-end market demand in medium-sized OLED, and maintaining leadership in large panels through differentiated products [73][79] - The company plans to maintain a CAPEX policy focused on future readiness and structural upgrades, with 2026 CAPEX expected to be around 2 trillion KRW [81] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing external uncertainties and volatility in global markets but emphasized the importance of stabilizing business performance through OLED growth and operational efficiency [71] - The company aims to achieve profitability in all business segments to regain market trust and shareholder confidence [112] Other Important Information - Cash and cash equivalents at quarter end were 1.573 trillion KRW, with total debt decreasing to 12.664 trillion KRW [41][43] - The company expects a decrease in shipment area across all categories in Q1 due to seasonality, with ASP per square meter projected to remain above $1,200 [50][52] Q&A Session Summary Question: Outlook for each business and expected performance for the year - Management highlighted the need to continue improving operational efficiency and profitability while addressing external uncertainties [91][97] Question: Strategic priorities for the company moving forward - The focus will be on becoming a technology-centric company and ensuring profitability across all business segments [100][112] Question: Mobile OLED shipment numbers and market opportunities - The company aims for mid-70 million units in panel shipments for smartphones in 2025, with a focus on closing the gap between first and second half shipments [130][134] Question: Impact of rising memory semiconductor prices on profitability - Management noted potential pressures on display prices and demand but stated that current impacts remain limited [138][140] Question: Outlook for IT business and potential turnaround - The company anticipates continued improvement in profitability while closely monitoring market conditions before making significant investments [146][150] Question: Strategy for large OLED panels and maintaining profitability - The company plans to strengthen its white OLED lineup and target a panel shipment of over 7 million in 2026, aiming for a 10% growth YOY [162][164]

Summary of Key Points from the Conference Call Industry Overview - The report focuses on the **Chinese economy**, particularly the impact of US tariffs on exports and the government's fiscal policies. Core Insights and Arguments 1. **Economic Growth Momentum**: Growth momentum in China weakened in August, with export growth in USD terms declining from 7.2% year-on-year in July to 4.4% in August, indicating the negative impact of US tariffs is being felt [3][4][5] 2. **Revised GDP Forecasts**: The Q3 real GDP growth forecast has been raised to 3.5% quarter-on-quarter annualized and 4.8% year-on-year, up from previous estimates of 2.5% and 4.6% respectively, due to more resilient exports than anticipated [5][37] 3. **High-Tech Manufacturing Resilience**: Despite a modest slowdown, high-tech exports have shown steady growth, with expectations for real export growth to increase to 2% for 2026, up from 0% previously [3][10] 4. **Policy Easing Delayed**: Policymakers are withholding fiscal spending, as evidenced by strong government bond issuance and rising fiscal deposits, indicating a preference to delay easing measures until 2026 [4][19] 5. **Structural Trends in Exports**: Exports of high-tech products are expected to continue rising, with monthly exports of ships, semiconductors, and motor vehicles reaching US$35 billion by mid-2025 [9][10] 6. **Fiscal Policy Dynamics**: Approximately RMB 1 trillion in extra fiscal deposits suggests that the government has room to maneuver if economic conditions worsen [17][24] 7. **Contractionary Policies**: Recent contractionary policies, such as "anti-involution" efforts, have led to rising PPI inflation in upstream sectors, but without demand stimulus, this could lead to production cuts [20][25] 8. **Local Government Financial Stress**: Financial stress on local governments has increased, with significant drops in fixed asset investment in provinces with high debt pressure [24][27] 9. **Consumer Demand and Policy Tools**: The government is exploring ways to boost consumption, but effective tools may take time to develop, indicating a gradual approach to stimulating domestic demand [33][29] Additional Important Insights - **Tariff Impact on Exports**: Exports to the US have dropped by around 30% year-on-year, but non-US markets have offset this decline, highlighting the resilience of certain sectors [8][6] - **Long-Term Economic Strategy**: The Chinese government remains focused on innovation and high-tech manufacturing as part of its long-term economic strategy, which is expected to continue in the upcoming Five-Year Plan [31][36] - **House Price Trends**: The report anticipates further declines in house prices, which may negatively impact household balance sheets and consumer sentiment over the next few years [30][29] This summary encapsulates the key points discussed in the conference call, providing a comprehensive overview of the current state and outlook of the Chinese economy amidst ongoing trade tensions and policy adjustments.