Blog Exposure – LG Display Gets South Korean Government’s Approval to Build OLED Plant in China

Stock Monitor: Methode Electronics Post Earnings Reporting

LONDON, UK / ACCESSWIRE / December 28, 2017 / Active-Investors.com has just released a free research report on LG Display Co., Ltd (NYSE: LPL). If you want access to this report all you need to do is sign up now by clicking the following link www.active-investors.com/registration-sg/?symbol=LPL as the Company’s latest news hit the wire. On December 26, 2017, the Company announced that it has received the approval from the South Korea’s Ministry of Trade, Industry, and Energy to build its first organic light-emitting diode (OLED) production unit in China. The OLED plant is expected to be built in Guangzhou, China. Register today and get access to over 1000 Free Research Reports by joining our site below:

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The Ministry’s approval comes with certain stipulations. The stipulations include the increased use of local materials and equipment, the boost of investments in South Korea, and the implementation of appropriate security checks to strengthen processes and avoid technology leaks. The Ministry will give its final consent once the Company shares its plans to address the concerns raised.

The Ministry’s approvals come in after several rounds of meetings between the representatives of LG Display and the Ministry officials to address the various concerns raised.

LG Display has not made an official announcement in this matter.

Backdrop

LG Display had first announced the decision to build an OLED production unit in Guangzhou, China in July 2017. The increasing demand for the Company’s large-size OLED panels for TVs such as Wallpaper OLED and Crystal Sound OLED (CSO) influenced the Company’s decision to expand its production capacity. LG Display’s Chinese unit would mass produce the Company’s 8.5th generation (2,200mm X 2,500mm) large-size OLEDs. The Company planned to build a new OLED production line at its existing LCD production plant at Guangzhou, China. The Company also planned to take the JV route but keep the controlling stake in the JV company. Moreover, LG Display planned to invest 5 trillion-won (approximately $4.4 billion) to build the OLED plant in China.

The Company’s Board had approved the decision and had approached the Ministry for approval. The OLED technologies is one of the country’s designated key technologies and is supported by the government subsidies and hence manufacturers require Government’s approvals on such decisions.

LG Display has an existing OLED manufacturing facility at Paju, South Korea where it plans to manufacture 10.5th generation (2,940mm X 3,370mm) large-size OLEDs and 6th generation (1,500mm X 1,850mm) plastic OLED (POLED). LG Display has earmarked approximately capital outlay of KRW 15 trillion into OLED production up to FY20 at its Paju facility.

LG Display’s strategy is to shift the manufacturing of larger OLEDs to China while continuing to produce smaller OLEDs in South Korea.

Areas of Concerns

The Ministry’s major concern was with regards to technology leaks to Chinese companies. The government’s concerns are justified given that Chinese companies are notorious for launching copycat products. This is especially true for information and communication technology (ICT) products. Given the rapid advancements in technology, countries are being protective of their technology and intellectual properties.

Korea has been in the lead when it comes to export of ICT products which include semiconductor chips and display products such as computers, laptops, tablets, mobiles phones, and OLEDs. These ICT products account for approximately 60% of the Company’s annual exports. China is one of the largest importers of South Korea’s ICT products.

LG Display’s market share in the display segment is 19.3% as of end of Q3 2017 behind China’s BOE Technology Group, which has 21.7% market share. LG has retained the number one position in this segment since 2009 and the current move to the second position is attributed to the losses caused due to delay in shifting from LCD to OLED technology.

About LG Display Co., Ltd

Seoul, South Korea-based LG Display is the world’s leading and most innovative display company. The Company produces displays for diverse applications such as TV, IT, Mobile, Commercial, Automotive displays, and OLED Light. The Company maintains its leadership position with continuous R&D and investment in next- generation displays such as Flexible and Transparent displays. The Company has manufacturing facilities and offices across various locations worldwide and is supported by a team of approximately 49,000 employees.

Stock Performance Snapshot

December 27, 2017 – At Wednesday’s closing bell, LG Display’s stock advanced 2.51%, ending the trading session at $13.89.

Volume traded for the day: 353.63 thousand shares.

Stock performance in the previous three-month period – up 2.66%; past twelve-month period – up 5.63%; and year-to-date – up 8.09%

After yesterday’s close, LG Display’s market cap was at $9.87 billion.

Price to Earnings (P/E) ratio was at 4.18.

The stock has a dividend yield of 1.58%.

The stock is part of the Technology sector, categorized under the Diversified Electronics industry. This sector was up 0.1% at the end of the session.

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