LG.Display Company Ltd. ADRLPL

Morningstar Rating

Stock Research and Analysis

by Stephen Simko

The LCD industry has grown dramatically this decade. As one of the largest Liquid Crystal Display (LCD) makers in the world, South Korea's LG Display has been one of the prime beneficiaries of that growth. However, lack of product differentiation and Read more

Bulls Say

As one of the biggest suppliers of LCD panels, LG Display enjoys economies of scale beyond the grasp of smaller rivals.

LG gained market almost 6% market share during 2008 and is now the second-largest LCD maker (27% market share) in the world after Samsung (28%).

LG Display has customers with strong consumer brand-building experience, including Hewlett Packard HPQ, Apple AAPL, Toshiba TOSBF, and Royal Philips PHG. Read more

Bears Say

The global economic downturn has set off the worst pricing pressures the LCD industry has ever seen, with prices falling by 30% to 50% in 2008 across all product types. This has recently caused LG Display's profitability to collapse, and it is unclear how long it will take for the company to get back into the black.

In addition to falling prices, the LCD industry's dependence on consumer spending will likely lead to slowing shipments growth for the remainder of the current recession.

LCD panels are standardized products, which makes LG Display a price taker. The company thus sees wild swings in sales in profitability as a result of changes in LCD supply and demand. Read more

Strategy

LG Display strives to be the leading manufacturer of flat-panel displays in the TV and computer markets. The company places particular emphasis on developing panels with wider viewing angles and physical Read more

Management

Currently, LG Electronics and Philips own a combined 50% of the LG Display's outstanding equity, a figure that has been recently reduced after Philips sold a large portion of its stake recently. LG Display has supplier and customer relationships with Read more

Profile

Korean display manufacturer LG Display designs and builds LCD displays primarily for televisions (49% of 2008 sales), desktop monitors (23%), and notebook computers (23%). Read more

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