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01/10 16:56
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call reveals several concerns: a mid-20% decline in area shipment due to the LCD TV business exit, investment risks, and competition in the IT segment. Despite a 15% revenue increase, the absence of a share repurchase plan and lack of clear guidance on adjustments to business plans amid uncertainties add to negative sentiment. The Q&A section highlights management's evasive responses and external challenges, further impacting the outlook. Given the $4.02 billion market cap, these factors suggest a negative stock price movement of -2% to -8%.
Revenue KRW 6,065.3 billion, an increase of 15% year-over-year due to OLED-centric business structural upgrades and a $1 FX impact.
Operating Profit KRW 33.5 billion, an improvement of KRW 509.2 billion year-over-year and KRW 1,131.8 billion versus Q1 of 2023, attributed to stringent cost savings and operational efficiency.
EBITDA KRW 1,231.3 billion with an EBITDA margin of 20%, the highest since Q3 of 2021.
Area Shipment Down 19% Q-on-Q but up 1% year-over-year, driven by panel shipment expansion for OLED TV and notebooks.
ASP per Square Meter $804, down 8% Q-on-Q, with the decline mitigated by robust OLED performance.
Cash and Cash Equivalents KRW 982.3 billion, or KRW 2,372.8 billion including cash held by China's Guangzhou LCD plant classified under assets held for sale.
Investment Investment last year was KRW 2.2 trillion, with expected investment in 2025 around mid- to low KRW 2 trillion.
OLED for Mobile: OLED for mobile has won greater trust from customers, expanding presence in the high-end market.
IT OLED: Expect year-over-year growth in shipment in 2025 due to outstanding performance and durability features.
Large OLED Business: Solidifying market presence in high-end segment with premium product portfolio including gaming monitors and Gen 4 OLED TVs.
Auto Business: Fortifying position as global #1 in differentiated products and technology portfolio, including plastic OLED and high-end LTPS LCD.
Market Positioning in IT Segment: Monitoring market movements and responding agilely to changes, leveraging differentiated high-end LCD technologies.
Large Panel Business: Revenue from large panel may decline due to the sale of Guangzhou LCD TV plant, focusing on OLED-centric upgrades.
Operational Efficiency: Rigorous cost-based innovation and operational efficiency efforts to sustain bottom line enhancement.
Investment Strategy: Investment in 2025 expected to be around mid- to low KRW 2 trillion, focusing on profit and conservative CapEx.
Strategic Shift in Large Panel Business: Closing of Guangzhou LCD TV plant to focus on OLED-centric structural upgrades.
Focus on Core Competitiveness: Enhancing quality and cost to drive shipment expansion and respond to fast-changing market.
Market Uncertainties: The company faces uncertainties in the downstream market and heightened volatility in the global trade environment.
Supply Chain Challenges: There are challenges related to maintaining stable supply and responding to fast-changing market conditions.
Decline in Area Shipment: Following the discontinuation of the LCD TV business, the company expects a mid-20% decline in area shipment for Q2.
Investment Risks: The company is adopting a conservative stance on investments due to changing external environments and demand fluctuations.
Competition in IT Segment: The company must respond to competition in the IT LCD segment while leveraging high-end technologies to meet customer needs.
Volatility in Auto Market: The overall auto market shows volatility, which could impact the demand for in-vehicle displays.
Revenue Decline from Large Panel Business: Revenue from large panels is expected to decline following the sale of the Guangzhou LCD TV plant.
OLED-centric structural upgrades: The company is focusing on OLED-centric structural upgrades to enhance core competitiveness and drive shipment expansion.
Investment Plans: Investment in 2025 is expected to be around mid- to low KRW 2 trillion, with a focus on profit-oriented operations and prudent CapEx spending.
Auto Business Strategy: The company aims to fortify its position as global #1 in the auto display market with differentiated products and technology.
IT Segment Strategy: In the IT segment, the company plans to leverage technological leadership and stable mass production to solidify market position.
Large Panel Business Focus: Following the sale of the Guangzhou LCD TV plant, the company will focus on OLED-centric structural upgrades.
Q2 Area Shipment Guidance: Area shipment is expected to decline by around mid-20% in Q2 due to the discontinuation of the LCD TV business.
Q2 ASP Guidance: ASP per square meter is expected to rise by around 20% in Q2.
2025 IT OLED Shipment Growth: Year-over-year growth in IT OLED shipment is expected in 2025.
2025 Investment Guidance: Investment in 2025 is expected to be around mid- to low KRW 2 trillion.
Profitability Focus: The company will prioritize profitability in future investment decisions.
Share Repurchase Program: The company maintains a profit-focused business operation and adheres to a conservative stance regarding investments, but no specific share repurchase program was mentioned in the call.
The earnings call indicates strong financial performance with significant improvements in operating profit and EBITDA. OLED products are driving revenue growth, and the company is focused on cost innovation and strategic partnerships. Despite some Q&A concerns, management's strategies appear robust. The market cap suggests moderate stock price movement, leading to a positive outlook.
The earnings call reflects positive sentiment with strong financial performance, including a significant net income and EBITDA margin. The strategic shift to OLED and cost efficiency improvements are promising. Despite shipment declines in some areas, ASP increases and debt reduction are positive indicators. The Q&A section highlights growth expectations in the smartphone business and OLED monitors, though some details remain confidential. Considering the market cap, the stock is likely to experience a positive movement in the range of 2% to 8% over the next two weeks.
The earnings call reveals several concerns: a mid-20% decline in area shipment due to the LCD TV business exit, investment risks, and competition in the IT segment. Despite a 15% revenue increase, the absence of a share repurchase plan and lack of clear guidance on adjustments to business plans amid uncertainties add to negative sentiment. The Q&A section highlights management's evasive responses and external challenges, further impacting the outlook. Given the $4.02 billion market cap, these factors suggest a negative stock price movement of -2% to -8%.
The earnings call summary reveals several concerns: sluggish demand in the IT segment, increased debt levels, and competitive pressures in the OLED market. Despite strong revenue growth, the operating loss and high debt-to-equity ratio indicate financial strain. The Q&A session highlighted uncertainties in cash management and competitive strategies, further exacerbating negative sentiment. The market cap suggests moderate sensitivity to these issues. Overall, the combination of financial strain, market uncertainties, and unclear management responses lead to a 'Negative' sentiment rating, predicting a stock price decline of -2% to -8%.
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