LG. Display Co. Ltd. (LPL) reported disappointing 3Q 08 results with revenues and earnings below our expectations and its revised guidance given on 10 September 2008. The ongoing decline in demand for LCD panels and a demand-supply imbalance in the industry led to a significant decline in the company’s Average Selling Prices (ASPs) during the quarter, severely impacting revenue growth and margins of the company. While the long term demand outlook for LCD panels remains favorable, a continued demand-supply imbalance until 1H 09 will lead to a sharp decline in ASPs and limit margin expansion of the company in the medium term. In view of this, we now hold a muted outlook for the company for the medium term. However, we believe the long term demand outlook for LCD panels remains strong, primarily resulting from emerging markets. Furthermore, the LPL common stock has declined significantly since our previous update report and trades below its fundamental value. Therefore, we view it as an attractive investment opportunity at current price levels.

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