LG Display (US:LPL)2023-07-26 09:18Financial Data and Key Metrics Changes - Revenue in Q2 2023 was KRW 4.739 trillion, up 7% quarter-over-quarter [15] - Operating loss was KRW 881 billion, reduced from the previous quarter due to increased shipments and improved operational efficiency [19] - Cash and cash equivalents were KRW 3.853 trillion, with inventory valued at KRW 2.62 trillion [40] - Debt-to-equity ratio was 293% and net debt-to-equity ratio was 143% [40] Business Line Data and Key Metrics Changes - TV panels accounted for 24% of revenue mix, driven by growth in OLED TV panel shipments [16] - IT panels represented 42% of revenue, up 4 percentage points quarter-over-quarter [16] - Mobile and other panels made up 23% of revenue, down 9 percentage points due to seasonal declines [16] - Auto business maintained a steady revenue mix of 11% [16] Market Data and Key Metrics Changes - Order backlog is currently KRW 20 trillion, expected to support consistent revenue growth [6] - Area shipment increased by 11% quarter-over-quarter to 4.72 million square meters [20] - Average selling price (ASP) per square meter was $803, down 6% quarter-over-quarter [20] Company Strategy and Development Direction - The company aims to strengthen its OLED market share across all panel sizes, expecting OLED revenue mix to surpass 50% this year [18] - Focus on diversifying product portfolio into new applications like gaming and transparent displays [23] - Plans to increase contract-based business revenue mix to 40% this year and 50% next year, targeting 70% in the next 2-3 years [43] Management Comments on Operating Environment and Future Outlook - Management anticipates a turnaround to profit in Q4 2023, driven by healthy inventory levels and growth in contract-based business [45] - The market is not yet in full recovery, but inventory soundness is improving, leading to growth in panel purchases [42] - The company is closely monitoring external environments to enhance financial soundness and upgrade business structure [45] Other Important Information - The company is investing in IT OLED Gen 6, with plans to continue into the first half of next year [29] - Investment guidance for 2023 remains mid to high KRW 3 trillion, with potential reductions for 2024 based on market demand and technological developments [52][53] Q&A Session Summary Question: What will be the biggest contribution to the expected turnaround in Q4? - Management indicated that the turnaround is expected from increased shipments, particularly in large and medium-sized OLED panels as inventory levels decrease [26][27] Question: What is the expected investment for 2023 and 2024? - The company confirmed the investment guidance for 2023 remains mid to high KRW 3 trillion, with potential reductions for 2024 based on market conditions [50][52] Question: What is the company's outlook on the auto business orders? - The auto business has received KRW 4 trillion in orders, with expectations for continued growth in the coming years [62] Question: What is the status of the LCD fab in Guangzhou, China? - Management stated that half of the fab is still operational, and there are no significant updates regarding asset rationalization at this time [64]