New Valuations

LG Display Co. Ltd (NYSE:LPL) LCD TV industry sales in the Chinese golden week were pretty strong and the trend is expected to continue in shopping for the Chinese Lunar new year. Consequently, we expect LG Display's 4Q 09 shipments to be supported by customers stocking inventories ahead of the shopping season. Additionally, we expect 4Q 09 shipment growth to be supported by channel inventories being replenished for Christmas shopping in the US post the stronger-than-expected 'Black Friday' sales and in Europe. In addition, upcoming events such as the Super Bowl XLIV, Winter Olympics 2010 and the FIFA World Cup 2010 are expected to provide further support to LG Display's shipments in 4Q 09 and FY 2010. Although we expect IT spending to remain soft in 4Q 09, we expect corporate PC upgrades to boost IT panel shipments in FY 2010. The Chinese government is also expected to increase rural subsidies for TV and PC purchases in its stimulus program in 2010 which again will benefit shipments. Subsequently, despite the negative impact of a strengthening won we expect LG Display to register strong y-o-y revenue growth in 4Q 09 and flat revenue growth y-o-y in FY 2010. Moreover, despite the negative impact on margins from negative currency movements, an expected oversupply situation in 1H 10 and the growing contribution of LED TVs to revenues, which are currently more expensive to manufacture than conventional LCD TVs, we expect margins to improve on a y-o-y basis, supported by cost management efforts. Consequently we hold a positive outlook for the stock and reiterate our BUY rating.

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