LG Display to Post Strong Q1 Results
Posted by: Jin on: April 8, 2008
It is just me or does there seem to be some unusually positive expectations for LG Display? It might be just me, but I think the financial community needs to curtail its expectations just a bit. For instance, John Soh, an analyst at Goodmorning Shinhan Securities, stated that “LCD TVs and notebook computers are becoming widespread globally, leading the trend. LG Display should see its best results ever this year.” That is a grand statement. I think 2008 will be at best a difficult year for most LCD manufacturers because of an uncertain US economy that will no doubt have negative reverberations throughout the rest of the world. Trust me, I would like to see results that show a strong global LCD economy and data-backed indicators that point to a strong 2008. But I don’t think that will happen. We are already seeing a weaker than expected Q1 for LCD TVs.
April 9, 2008 at 7:50 am
A breath of fresh air from someone who actually has no axe to grind. I’ve been following the LCD industry for ~6 yrs as an analyst, and its interesting to note that analysts in panel producing countries tend to be the last to acknowledge any incremental change in the LCD environment until they have been hit over the head with it. Chinese New Year, the last time OEMs ordered for an event, was a disaster. We will never know whether they ordered incorrectly, or whether it was due to the snowstorm, however its a known fact that inventory levels escalated from the normal 3-4 weeks to at least 6-7. With slowing demand in the TV space, it remains a question as to how much of that is gone, and how aggressive the OEMs are being, or will be in anticipation of the Chinese Olympics, another event, particularly one where we have very little local Chinese LCD TV buying habit info.
Another poor set of decisions, meaning over ordering or less demand than anticipated, would be dangerous to the 3rd quarter build period and put a major crimp in the year for the panel producers.
It all means that the risk level for the panel guys is higher than it was last year, when we saw rising prices, no capex, and strong demand. I don’t need to rethink my numbers, but I agree whole haeartedly with Jin. While I might be a bit on the pessimistic side, always waving the flag does every investor a disservice.