LG Display to reap rewards of Apple’s latest success

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LG Display to reap rewards of Apple’s latest success

HONG KONG - LG Display will benefit from the launch of the latest iPhone, solidifying its status as a panel supplier for Apple, foreign investors said.

LG Display is enjoying stronger orders as well as favorable pricing terms with Apple, as the U.S. firm sharply reduced new panel supplies from rival Samsung Electronics for its iPad, Macquarie Securities said in its report.

Apple is embroiled in global patent disputes with Samsung Electronics, maker of the Galaxy range of smartphones.

New York-based Topeka Capital Markets also said the global fever over the iPhone 5, which became available in nine countries yesterday, will boost LG Display’s performance.
“Because of blockbuster iPhone 5 pre-order demand at Apple and growing demand for high-end specialty products, we are upgrading our investment rating on LG Display to ‘Buy’ from ‘Hold’,” said Brian White at Topeka Capital Markets.

Macquarie recently raised its target stock price for LG Display to 38,000 won ($34) from 34,000 won.

“The slope of earnings rebound in the third quarter of 2012 should be steeper than we expected,” said Daniel Kim at Macquarie.

“The upward trend should continue in the fourth quarter as the company started mass production of panels for iPhone 5 in August and for the widely expected iPad ‘mini’ in September.”

The investment bank stressed that LG Display is the only panel player covering the range from small-size mobile screens to large-size panels.

It estimated LG Display commands a dominant share of panel supplies for Apple products - 40 percent for iPhone, 60 percent for iPad and 90 percent for laptops, such as the MacBook and iMac.

Bank of America Merrill Lynch also upgraded its investment stance on LG Display from “Neutral” to “Buy” with a target price of 40,000 won. “Our understanding indicates LG Display’s good market share gains for Apple products - about 40-50 percent for new iPad 2 and iPhone 5 panels,” said Simon Woo of Bank of America.

“This confirms to us LG Display’s good execution for new technologies.”
LG Display’s low temperature polysilicon (LTPS) liquid crystal panels should offer a continuous upside to valuations as they are well differentiated with high added value, particularly for high-end smartphones such as the iPhone 5, the bank said.

LTPS panels account for about 10 percent of LG Display’s second half sales, but that is expected to rise to between 15 percent and 20 percent in the second half of 2013, it added.


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