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「俄罗斯乌克兰局势」LG Display-Fears should be short lived

Marketfrettingovertumblingpanelprices…LGDisplaysharesralliedinJune,whichweattributetooptimismoverthecompany’sOLEDinvestments—nottohikesinpanelpricesandresultantimprovementsinoperatingprofit.Indeed,sharesslid5%whenthefirmpostedanoperatingprofitofoverKRW1tfor1Qbutthenleapt23%eventhough2Qresultswerecertaintocomeinweakerq-q.Sharesthenstartedslidinginmid-Julyonworriesofacceleratingpricedeclinesoflarge-sizedpanels.FewexpectLCDpanelpricehikesthatstartedinmid-2016topersistthrough2H.Webelievedeclinesinpanelpricestriggeredprofittakingonthestock,whichhadsurgedto1xP/BonOLEDmomentum.

…andslowingdemand:Riskfactorsin2HincludeanaccelerationofpanelpricedeclinesifTVandmobilemarketsturnoutweakerthanexpected.Yet,wethinkpaneldemandfrombothmarketswillpickupintheseasonallystronghalfconsideringmarketpriceshavefallensomewhatafteradearthofdemandinJuly.Meanwhile,itisastretchtoassumethatLGD’sproductpriceswillfallasmuchasmarketpricesdo,giventhecompany’s:1)TV-useportionofpanelsaleswas46%in2Q17,with60-70%ofthatcomingfromin-favorUHDpanels;and2)blendedASPshouldriseq-qonanexpandingmobile-useportionofpanels.Still,therewhethersetmakers’paneldemandwillrecovertousuallevelsisuncertain.

CuttingtargettoKRW39,000butmaintainingBUY:AhistoricalP/BtrendshowsthatfearsoffallingLCDpanelpriceswerereflectedineverydownwardphaseofacycle.ShareshaverecentlynearedthelowerendoftheirhistoricalP/Bband,sosmartmoneyislikelytostartmullingthetimingofanupturn.Expectingshort-termsharepricemovementstobelimitedamidgrowingmarketfears,wecutourtargetpricetoKRW39,000butkeepourearningsforecastsintact.Wearriveatournewtargetbyremovinga10%premiumwehadappliedfortheOLEDbusinesstobalanceincreasedrisksofLCDpanelpricedeclines.Thatsaid,weexpectfearstobeshortlivedforthecyclicalstockandthusbelieveextendedcorrectionsprovideabuyingopportunityforlongterminvestors.WemaintainBUY.

InvestmentDailyHongKongGDP:Q2GDPbeatsexpectations引荐阅览:股票技术指标只需你看前期的升幅,就毛骨悚然。黑马掘金!
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