Panel manufacturer Q1 will suffer a blood loss of 1 billion!

LG Innotek and LG Display, both subsidiaries of LG Electronics, appear to have posted operating profits in the fourth quarter of last year despite the sluggish market. LG Display is on track to turn a profit in the fourth quarter. The consensus of the securities industry is that the operating profit will be 235.5 billion won, which is expected to be the first profit in a year since the fourth quarter of 2023. The main factors were interpreted as higher panel shipments due to moving seasonality and a stronger US dollar.

However, IT is also observed that due to the decline in demand for IT OLED (organic light-emitting diode) panels and the cost of improving human resource efficiency, its expectations may be significantly lower than expected. "Domestic OLED exports for tablets and laptops fell 37 percent in the fourth quarter from the previous quarter, and IT panel shipments also showed a downturn," Kiwoom Securities said. In addition, due to the impact of the voluntary retirement of production staff (3Q) and office staff (4Q), this part of the cost is also reflected, and the operating profit is expected to be limited to about 178 billion won in the fourth quarter. LG Electronics holds a 37.9 percent stake in LG Display and its share of LG Display's net revenue is reflected in its profit and loss. LG Electronics' consolidated net profit is expected to improve in the fourth quarter due to higher equity method earnings. On the other hand, LG Electronics saved face in the fourth quarter with its affiliates, but the first half of this year is expected to be very different. During this period, LG Electronics' main businesses such as home appliances and TVS are expected to perform well, but displays and electronic components are expected to perform poorly due to the off-season. The consensus of the securities industry for the first quarter of this year is that LG Innotek posted a profit of 122 billion won and LG Display suffered a loss of 202.4 billion won.