Display (Overweight) Searching for diamonds in the rough
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2021 Outlook | December 1, 2020 Display (Overweight) Searching for diamonds in the rough Chuljoong Kim chuljoong.kim@miraeasset.com Analysts who prepared this report are registered as research analysts in Korea but not in any other jurisdiction, including the US PLEASE SEE ANALYST CERTIFICATIONS AND IMPORTANT DISCLOSURES & DISCLAIMERS IN APPENDIX 1 AT THE END OF REPORT.
Contents
[Summary] 3
I. 2020 review 4
II. 2021 outlook 7
III. Global peer group 17
IV. Company analysis 19
LG Display/Duksan Neolux
2 | [2021 Outlook] Display Mirae Asset Daewoo Research
[Summary] Stable LCD supply/demand, higher OLED penetration
LCD/OLED market outlook
LCD: Industry consolidation and stable supply/demand to continue Samsung Display: OLED capacity utilization trends
(mn m2) (%) (mn units) Foldable (L) Flexible (L) (%)
400 Demand (L) Supply (L) Oversupply ratio (R) 20 1,000 Rigid (L) Foldable YoY (R) 150
Flexible YoY (R) Rigid YoY (R)
800 120
300 15 2021F OLED shipments
Foldable: +140% YoY
Flexible: +61% YoY 345
600 Rigid: +21.6% YoY 342 90
327
200 10
400 60
269
100 5 441
200 408 30
360
224
0 0 0 5 12 16 25 0
2016 2017 2018 2019 2020 2021F 2022F 2023F 2020 2021F 2022F 2023F
Source: Omdia, Mirae Asset Daewoo Research Source: Stone Partners, Mirae Asset Daewoo Research
3 | [2021 Outlook] Display Mirae Asset Daewoo Research
I. [2020 review] LCD: Unexpected demand growth
LCD demand surged • Contrary to initial expectations, demand for IT products (TVs, monitors, notebooks, etc.) has increased globally
amid the COVID-19 pandemic, driven by: 1) the boost to disposable income from stimulus payments; and 2) the
unexpectedly due to the
rise of the contactless culture (remote work, etc.).
pandemic • TV demand has been particularly strong in North America and Europe.
• TV panel purchases by Chinese TV makers increased 26% YoY in 3Q20, and those by Korean TV makers are
projected to jump 39% YoY in 4Q20.
Panel purchase volumes of Korean TV makers Panel purchase volumes of top-tier Chinese TV makers
(mn units) (%) (mn units) (%)
25 2017 2018 2019 50 30 2017 2018 2019 50
2020 2021 YoY (R) 2020 2021 YoY (R)
39 40 25 40
20
30 20 30
15
20 15 20
10
10 10 10
4 4
5
0 5 0
-3
0 -10 0 -10
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
Source: Omdia, Mirae Asset Daewoo Research Source: Omdia, Mirae Asset Daewoo Research
4 | [2021 Outlook] Display Mirae Asset Daewoo ResearchI. [2020 review] LCD: Unexpected demand growth
LCD panel prices have • LCD panel prices have soared; price changes compared to end-2Q20 levels are as follows (as of end-November):
surged at a record pace • TV panel prices: +82% for 32”, +58% for 43”, +56% for 55”, and +31% for 65”
• Notebook/monitor panel prices: +17% for 11.6” notebooks and +12% for 21.5” monitors
• Global average OP margin of small/medium-sized LCD panels: 3-4% in 3Q20 vs. 9-10% in 4Q20
LCD panel price changes Panel prices have soared from end-2Q20 levels
(%) (%)
10.0 100
Notebook TV (FHD) TV (UHD) Monitor
8.0
82
80
6.0
4.0
58 56
60
2.0
0.0
40
31
-2.0
-4.0 20 17
12
-6.0
0
-8.0 32" 43" 55" 65" Notebook Monitor 21.5"
1/15 7/15 1/16 7/16 1/17 7/17 1/18 7/18 1/19 7/19 1/20 7/20 11.6"
Source: Omdia, Mirae Asset Daewoo Research Source: Omdia, Mirae Asset Daewoo Research
5 | [2021 Outlook] Display Mirae Asset Daewoo ResearchI. [2020 review] OLED: Weak 1H followed by robust 2H
Seasonal trends—a tepid • In the OLED market, the performance difference between 1H and 2H has been more pronounced this year, as
COVID-19 depressed smartphone demand in 1H.
1H followed by a strong
• Samsung Display: Capacity utilization at the A3 flexible OLED line has picked up sharply since August (from less
2H—more pronounced than 40% in 1H20).
amid COVID-19 • LG Display (LGD): Capacity utilization at the Paju and Guangzhou WOLED lines, which was low in 1H, has
increased rapidly since July.
• In early 2020, OLED investments were pushed back due to soft demand (Samsung Display and Chinese firms).
• Global OLED investments: 75,000 sheets/month in 2019 75,000 sheets/month in 2020
OLED line utilization at Samsung Display OLED investments were smaller than expected in early 2020
(%) SDC A1 SDC A2 SDC A3 (‘000 sheets/mo.) Tianma (Wtr)
100% 200 CSOT 25
SDC A2-E SDC A4 Visionox
BOE
LGD
Samsung Display
80% Global 6G flexible OLED capex (R) 20
150
60% 15
100
40% 10
50
20% 5
0% 0 0
1/19 4/19 7/19 10/19 1/20 4/20 7/20 10/20 2016 2017 2018 2019 2020F 2021F
Source: Omdia, Mirae Asset Daewoo Research Source: Omdia, Mirae Asset Daewoo Research
6 | [2021 Outlook] Display Mirae Asset Daewoo ResearchII. [2021 outlook] LCD: Solid demand to continue
Industry consolidation • Contrary to market concerns, we expect supply/demand conditions to remain stable for mid/large-sized LCD
panels, in light of the following:
and solid demand
1) LCD shutdowns are likely to continue in Korea.
2) With top-tier suppliers BOE and CSOT tightening their oligopolistic grip on the LCD market (combined market
share of over 40%), it is expected to turn into a seller’s market.
• Oversupply in the mid/large-sized segment should ease gradually (13.6% in 2019 8.4% in 2020F 2021F 10.6%
9.9% in 2022).
Mid/large-sized LCD supply/demand to remain stable thanks to LCD production capacity (7G+); Korean display makers to continue to
consolidation shed LCD lines
(mn m2) (%) ('000 m2)
400 Demand (L) Supply (L) Oversupply ratio (R) 20 50,000 LGD Samsung Display
40,000
300 15
13.6
12.2 30,000
10.6 10.0
200 10
9.3 9.4 9.9
8.4
20,000
100 5
10,000
0 0 0
2016 2017 2018 2019 2020 2021F 2022F 2023F 2016 2017 2018 2019 2020 2021F 2022F 2023F 2024F 2025F
Source: Omdia, Mirae Asset Daewoo Research Source: Omdia, Mirae Asset Daewoo Research
7 | [2021 Outlook] Display Mirae Asset Daewoo ResearchII. [2021 outlook] LCD: Solid demand to continue
LCD market becoming more oligopolistic (BOE and CSOT)
Acquisitions by BOE (CEC Panda) and CSOT (Samsung Display’s Suzhou LCD lines) pushed their combined M/S above 40% (based on capacity)
Large-scale integrated display + device (TV/monitor)
Officially announced on Sep. 23, 2020 manufacturing to take shape in 2021 Officially announced on Aug. 28, 2020
(LCD TV panel BP in 2020) (LCD TV panel BP in 2020)
BOE and CEC Panda (8.5/8.6G) TCL CSOT and Samsung Display Suzhou
67.4mn = 50mn + 17.4mn 52.1mn = 41.4mn + 10.7mn
Panel
BOE and CEC Panda (8.5/8.6G fabs) TCL CSOT and Samsung Display Suzhou
Manufacturing
BOE Display BG TCL CSOT
BOE VT TPV/Panda + + TCL brand/TCL SCBC
Samsung
(captive) (multiple) BOE VT TCL SCBC (multiple)
Brand and OEM
Philips/AOC/
BOE VT TPV OEM/Panda TCL brand/TCL SCBC Samsung
(private labels)
BOE VT = 9.4mn; TPV = 14mn TCL = 34mn; Samsung Display = 49mn
(LCD TV brand/OEM BP in 2020) (LCD TV brand/OEM BP in 2020)
Source: Omdia, Mirae Asset Daewoo Research
8 | [2021 Outlook] Display Mirae Asset Daewoo ResearchII. [2021 outlook] OLED: Shipments to expand sharply
OLED shipments to • In 2021, we expect OLED panel shipments to expand sharply YoY due to a low base of comparison and a
recovery in smartphone demand.
surge
• Flexible OLED panels: Shipments are forecast to surge 61% YoY, driven by iPhone models with flexible
OLED displays.
• Rigid OLED panels: Shipments are projected to jump 22% YoY, driven by the adoption of rigid OLED
panels by Oppo, Vivo, and Xiaomi.
• Foldable OLED panels: Shipments are forecast to reach 12mn units in 2021 and 16mn units in 2022.
OLED shipments forecasts (by form factor): Shipments to grow sharply in 2021
(mn units) (%)
Foldable (L) Flexible (L) Rigid (L)
1,000 150
Foldable YoY (R) Flexible YoY (R) Rigid YoY (R)
800 2021F OLED shipments 120
Foldable: +140% YoY
Flexible: +61% YoY
Rigid: +21.6% YoY
345
600 342 90
327
400 60
269
441
200 408 30
360
224
0 5 12 16 25 0
2020 2021F 2022F 2023F
Source: Stone Partners, Mirae Asset Daewoo Research
9 | [2021 Outlook] Display Mirae Asset Daewoo ResearchII. [2021 outlook] OLED: Investments to increase slightly
OLED investments • We expect investments in 6G flexible OLED panels to expand slightly, with new capacity increasing from
to increase slightly 75,000 sheets/month in both 2019 and 2020 to 105,000 sheets/month in 2021 (inclusive of Samsung
Display’s 30,000 sheets/month in 2H21).
• LGD is likely to add 15,000 sheets/month in new capacity in 2H21.
• In China, Visionox, CSOT, and Tianma—which have been slow to expand capacity this year—are
anticipated to increase investments.
6G OLED investments to grow slightly YoY; Samsung Display to resume investments in 2H21
Fab 2016 2017 2018 2019 2020F 2021F
Samsung Display A3 105
A4 30
A4-2 30
A5
Total 105 30 0 0 0 30
LGD E5 15
E6-1 15
E6-2 15
E6-3 15
Total 30 15 0 0 0 15
BOE B7 15 30
B11 15 30
B12 45
B15
Total 15 45 30 0 45 0
Visionox V2 15 15
V3 30 30
V4
Total 0 15 0 30 15 30
CSOT T4 15 30
T5 15
Total 0 15 0 30 0 15
Tianma Wuhan 15 15
Xiamen 15 15
Total 15 0 0 15 15 15
Total 165 120 30 75 75 105
No. of lines 11 8 2 5 5 7
Source: Omdia, Mirae Asset Daewoo Research
10 | [2021 Outlook] Display Mirae Asset Daewoo ResearchII. [2021 outlook] Foldable smartphone rollouts to pick up
More foldable • In 2021, smartphone makers including SEC will release more foldable models.
• SEC’s foldable product lineup will likely include: the Galaxy Z Fold Lite and the Galaxy Z Flip 2 (to be
products to hit the launched in 2Q21), the Galaxy Z Fold 3 (3Q21), and foldable IT products (4Q21).
market • The Galaxy Z Fold 3 is anticipated to feature advanced technologies, including universal product code
(UPC), a pol-less structure (no polarizer), low-temperature polycrystalline oxide (LTPO), and the S-Pen.
• Other foldable smartphones forecast to hit the market include LG Electronics’ (LGE) rollable smartphones
(2Q21), Lenovo Motorola’s Razr 2, and Xiaomi’s foldable models.
• Meanwhile, Apple is rumored to have begun working on foldable smartphones with LGD and Samsung
Display, with rollouts expected for 2023.
Foldable smartphone specifications and release dates
Panel Form
Brand Panel maker Model Size Status Cover window Notes
production factor
3Q20 Z Fold 2 7.7” Mass prod. Inward UTG Launched in 3Q20
2Q21 Z Fold Lite 7.29” Development Inward CPI Affordable version of Galaxy Fold
SEC Samsung Display 2Q21 Z Flip 2 6.7” Development Inward UTG Same panel as the Z Flip
3Q21 Z Fold 3 7.7-7.8” Development Inward UTG S-Pen, UPC, pol-less, LTPO (projected)
4Q21 Notebook/tablet 13.x” Development Inward CPI -
Mass prod. expected in Feb.-Mar.
LGE BOE 2Q21 Rollable 7.4” Development Rollable CPI
2021; roughly 100,000 units per year
BOE 1Q20 Mate Xs 8.03” Mass prod. Outward CPI -
Huawei BOE/
4Q20 Mate X2 8.03” Pending Inward CPI Pending
Samsung Display
Xiaomi CSOT 1Q21 - 8.01” Development Inward CPI Sub-display (6.52”), hole punch
BOE/CSOT 4Q19 Razr 6.2” Mass prod. Inward CPI Mass production began in 1Q20
Lenovo
BOE/Tianma/CSOT 1Q21 Razr 2 6.85” Development Inward CPI
Source: Omdia, Mirae Asset Daewoo Research
11 | [2021 Outlook] Display Mirae Asset Daewoo ResearchII. [2021 outlook] Samsung Display likely to resume OLED
investments in 2H
Samsung Display’s OLED • Samsung Display’s L7-2 production line conversion (from LCD to OLED) is expected to begin in 2H21, after a slight
delay due to an unexpected LCD market boom.
investments likely to
• We think Samsung Display will resume investments in 2H21 to meet the likely increase in demand from Apple (for
resume in 2H21 foldable smartphones in 2023 and iPads equipped with tandem OLEDs in 2022).
• Panel production capacity needs tend to increase exponentially as demand for large-sized panels expands.
Samsung Display: A3 line depreciation schedule Production capacity needs following OLED adoption by foldables/tablet PCs
( Operation Depreciation) (mn units)
50 Assuming 90% yield and 90% efficiency,
Max/ 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q we estimate output at 15,000 units/mo. (one line)
Fab Ph.
mo. 20 20 20 20 21 21 21 21 22 22 22 22
1 15,000 40 38
15,000
2 32
15,000 30
3
15,000
4 22
20
A3 5 15,000
15,000 12
6
10 8
7 15,000
8 15,000
0
9 15,000 6.06" (iPhone) 6.68" (iPhone) 7.7" (Z Fold 2) 10.5" (iPad) 13.0"
(notebook/tablet)
Source: OMDIA, Mirae Asset Daewoo Research Source: Mirae Asset Daewoo Research
12 | [2021 Outlook] Display Mirae Asset Daewoo ResearchII. [2021 outlook] OLED: New technologies deserve attention
Pol-less and LTPO • In 2021, we expect to see notable improvements in OLED technology focused on: 1) making panels thinner and
more flexible; 2) cutting production costs; and 3) improving panel efficiency.
• Pol-less structure (no polarizer): Thinner and more flexible displays and back-end process cost savings
• LTPO backplanes (iPhones): Panel efficiency improvements Likely to lead to orders for dry etchers, furnaces,
chemical vapor deposition (CVD), and sputters
• Tandem RGB OLED (iPads in 2022F): Longer panel life
Pol-less structure ensures thinner and more flexible displays Apple’s LTPO adoption to accelerate panel makers’ LCD line conversion
1. Surface reflection
2. Electrode reflection
3. Video release
Outdoor visibility
enhancement:
3 > 1+2
Source: LG디스플레이, Mirae Asset Daewoo Research Source: Stone Partners, Mirae Asset Daewoo Research
13 | [2021 Outlook] Display Mirae Asset Daewoo ResearchII. [2021 outlook] OLED TV price decline to accelerate
OLED TVs to gain market • The start of volume production at LGD’s Guangzhou OLED fab (60,000/month) should accelerate the decline of
OLED TV prices.
share in the high-end TV
• The increasing penetration of OLED basic module (OBM) technology should improve the TV industry’s cost
segment, supported by structure.
falling prices • LGE’s 55” OLED TV prices have declined, falling to US$1,200 at end-November (based on Black Friday promotions).
• The sharp rise in LCD panel prices is weighing on TV makers. Shifting focus to OLED TVs from LCD TVs in 1H21
should be more favorable to company-wide OP margin.
WOLED panel shipment/price outlook OBM technology/model overview
('000 units) 48" 55" 65" (US$)
2,500 77" 55" price (R) 65" price (R) 1,100
1,000
2,000
900
1,500
800
700
1,000
600
500
500
0 400
1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21
Source: Omdia, Mirae Asset Daewoo Research Source: Omdia, Mirae Asset Daewoo Research
14 | [2021 Outlook] Display Mirae Asset Daewoo ResearchII. [2021 outlook] Mini-LED: The last hope of LCD TVs
Mini-LED: The last hope • Major QLED TV players such as SEC and TCL are likely to ratchet up marketing for mini-LED TVs.
of LCD TVs • Mini-LED TVs have deeper black expression, higher LED density, and thinner form factors compared to QLED TVs.
• In 2021, we estimate SEC’s mini-LED TV shipment volume at 1.3-1.4mn units.
• Mini-LED TVs should enable TV makers without OLED TV models to defend their margins.
• We believe price positioning is the key. We estimate 65” mini-LED TV prices at the low-US$2,000 level for 4K and
over US$3,500 for 8K
• Taking 8K technology out of the equation, mini-LED TVs are slightly more expensive than OLED TVs.
8K mini-LED panel structure (65”) Mini-LED PCB module cost breakdown
8%
10%
31%
12%
11%
28%
PCB substrate (two-layer) Encapsulation (silicone)
LED driver IC (30) LED chip (1,100)
Assembly Other
Source: Stone Partners, Mirae Asset Daewoo Research Source: Stone Partners, Mirae Asset Daewoo Research
15 | [2021 Outlook] Display Mirae Asset Daewoo ResearchII. [2021 outlook] Domestic sourcing to gather pace
Domestic sourcing to • The display and battery industries’ shift to domestic sourcing, prompted by Japan’s export restrictions on
gather momentum Korea in 2019, should gather momentum in 2021.
• We believe noteworthy materials suppliers are PI Advanced Materials (PI film for COF), Innox Advanced
Materials (semiconductor/OLED materials), Duksan Neolux (PDL), and Iljin Materials (ultra-thin copper
foil for semiconductors).
• Among battery materials, separator films, which are still dominated by Japanese suppliers, have
potential.
Progress in domestic sourcing of display/battery materials
Product Japanese peers
PI Advanced Materials COF-use PI film Ube
Innox Advanced Materials Semiconductor/OLED materials Nitto Denko, etc.
Duksan Neolux - -
Iljin Materials Semiconductor-use copper foil Mitsui
W-Scope (listed in Japan) Separators Asahi Kasei, Toray
SKIET (IPO expected) Separators Asahi Kasei, Toray
Source: Stone Partners, Mirae Asset Daewoo Research
16 | [2021 Outlook] Display Mirae Asset Daewoo ResearchIII. Global peer group
Global display panel makers (Wbn, %, x)
Revenue OP NP ROE P/E P/B EV/EBITDA
Market cap
20F 21F 20F 21F 20F 21F 20F 21F 20F 21F 20F 21F 20F 21F
TCL 17,208 11,702 14,494 771 1,218 548 863 7.5 10.7 30.8 20.1 2.98 2.61 18.9 14.4
BOE 32,367 23,588 28,958 850 2,054 708 1,534 4.1 7.4 44.8 21.7 2.02 1.86 12.2 8.5
LGD 5,653 23,724 26,588 -511 768 -612 331 -5.5 3.0 - 17.1 0.5 0.5 4.8 3.2
AUO 4,906 10,415 11,499 -43 579 -15 526 -1.0 6.2 - 9.3 0.72 0.68 5.6 3.9
Innolux 4,141 10,412 11,474 -293 261 -294 258 -3.5 2.3 - 11.7 0.48 0.46 3.6 2.4
Tianma 6,567 5,348 6,343 264 316 234 264 3.8 3.7 25.7 22.9 1.16 1.12 10.8 10.8
Japan Display 458 3,859 3,734 -171 -86 -20 -33 - - - - 0.88 0.94 - 28.6
Avg. 0.9 5.3 33.8 18.8 1.25 1.17 9.3 10.3
Source: Bloomberg, Mirae Asset Daewoo Research
Global display panel makers: P/B-ROE (2021F) comparison Global display panel makers: Relative share performance
(P/B, x) (7/19=100) TCL BOE LGD
3.0 AUO Innolux Tianma
200
Japan Display
TCL
2.5
150
2.0
BOE
1.5 100
Tianma
1.0
AUO
LGD 50
0.5
Innolux (ROE, %)
0.0 0
0.0 2.0 4.0 6.0 8.0 10.0 12.0 7/19 10/19 1/20 4/20 7/20
Source: Bloomberg, Mirae Asset Daewoo Research
Source: Bloomberg, Mirae Asset Daewoo Research
17 | [2021 Outlook] Display Mirae Asset Daewoo ResearchIII. Global peer group
Global display equipment makers (Wbn, %, x)
Revenue OP NP ROE P/E P/B EV/EBITDA
Market cap
20F 21F 20F 21F 20F 21F 20F 21F 20F 21F 20F 21F 20F 21F
AP Systems 340 599 706 42 57 23 36 18.1 23.6 15.8 9.8 2.6 2.1 7.3 5.4
ICD 280 343 342 65 51 49 40 28.4 18.9 5.7 6.9 1.4 1.2 3.6 3.9
SFA Engineering 1,341 1,686 1,850 201 231 127 157 13.7 15.1 10.4 8.4 1.3 1.2 5.7 4.9
Wonik IPS 1,919 1,082 1,280 179 216 132 173 20.7 22.2 14.5 11.0 2.7 2.2 8.1 6.7
Coherent 3,268 1,537 1,767 213 351 74 169 - - 22.9 14.5 - - 13.3 8.4
AMAT 83,329 21,594 23,197 5,979 6,551 4,979 5,511 37.3 31.3 16.8 15.3 5.7 4.7 13.1 11.9
Ulvac 2,300 1,774 1,917 159 211 107 145 6.3 8.3 21.6 16.3 1.3 1.3 8.4 6.7
TEL 61,221 13,678 14,817 3,031 3,509 2,310 2,683 24.9 25.9 26.3 22.4 6.0 5.4 16.8 14.6
Avg. 22.1 21.0 16.2 13.9 3.0 2.6 9.6 8.0
Source: Bloomberg, Mirae Asset Daewoo Research
Global display materials suppliers (Wbn, %, x)
Revenue OP NP ROE P/E P/B EV/EBITDA
Market cap
20F 21F 20F 21F 20F 21F 20F 21F 20F 21F 20F 21F 20F 21F
Duksan Neolux 758 142 169 37 46 34 41 19.3 19.1 22.2 18.5 3.9 3.2 17.3 13.6
UDC 11,935 444 607 141 266 122 225 11.9 17.9 93.3 54.6 11.9 9.8 60.7 38.2
PI Advanced Materials 949 257 301 58 72 42 56 15.9 18.7 22.3 16.8 3.3 3.0 11.8 9.2
Taimide 305 - - - - - - - - - - - - - -
Kaneka 2,318 5,961 6,347 229 304 112 167 3.2 4.5 19.9 13.3 0.6 0.6 6.0 5.2
Innox Advanced Materials 426 348 450 45 62 33 44 17.0 19.2 12.9 9.6 1.9 1.6 7.2 5.2
BH 740 806 989 76 111 68 92 21.4 22.9 10.4 7.7 2.0 1.6 6.9 5.3
Tanyuan Technology 465 - - - - - - - - 18.7 11.1 - - - -
Jones Tech 1,288 205 292 42 62 36 53 21.0 24.4 36.0 24.2 8.5 6.9 27.2 19.0
Silicon Works 782 1,020 1,158 82 104 69 87 13.8 15.5 11.3 9.0 1.5 1.3 5.6 4.3
Novatek 7,147 3,094 3,427 550 619 446 502 32.2 31.8 16.2 14.5 5.0 4.5 11.3 10.2
Avg. 17.3 19.3 26.3 17.9 4.3 3.6 17.1 12.2
Source: Bloomberg, Mirae Asset Daewoo Research
18 | [2021 Outlook] Display Mirae Asset Daewoo ResearchLG Display (034220 KS) Top pick
Likely to outperform expectations in 2021
Investment points
(Maintain) Buy
• LG Display’s (LGD) TV and IT panel businesses should continue to generate profit, supported by solid LCD
supply/demand conditions.
Target price (12M, W) 21,000
• In 2021, we anticipate LGD’s POLED supply for iPhone models to range from 40mn to 50mn units, supporting
utilization throughout the year.
Current price (12/1/20, W) 15,800 • We expect OLED TVs to gain share in the high-end TV market, aided by falling prices.
• We believe LGD’ s profit generation in 2H20 will lead to additional capex. LGD is likely to add POLED capacity
Expected return 33% (E6-3) and invest in WOLED capacity (Guangzhou; 30,000 sheets/month).
Risk factors
• Another game of chicken initiated by Chinese players
OP (20F, Wbn) -511 • Sharp decline in demand for TVs/IT devices
Consensus OP (20F, Wbn) -503
EPS growth (20F, %) -
P/E (20F, x) -
Market P/E (20F, x) 18.0
KOSPI 2,634.25
Market cap (Wbn) 5,653 130 (Dec.) 2016 2017 2018 2019 2020F 2021F
LG Display
Shares outstanding (mn) 358 KOSPI Revenue (Wbn) 26,504 27,790 24,337 23,476 23,724 26,588
120
Free float (%) 58.8 OP (Wbn) 1,311 2,462 93 -1,359 -511 768
110
Foreign ownership (%) 23.0 OP margin (%) 4.9 8.9 0.4 -5.8 -2.2 2.9
Beta (12M) 1.16 100 NP (Wbn) 907 1,803 -207 -2,830 -612 331
52-week low (W) 8,900 EPS (W) 2,534 5,038 -579 -7,908 -1,711 925
90
52-week high (W) 16,750 ROE (%) 7.2 13.2 -1.5 -22.4 -5.5 3.0
(%) 1M 6M 12M 80 P/E (x) 12.4 5.9 - - - 17.1
Absolute 12.5 48.4 7.5 P/B (x) 0.9 0.7 0.5 0.5 0.5 0.5
70
Relative -3.2 16.3 -14.8 19.11 20.2 20.5 20.8 20.11 Div. yield (%) 1.6 1.7 0.0 0.0 0.0 0.0
Notes: Under consolidated K-IFRS; NP is attributable to owners of the parent
Source: LG Display, Mirae Asset Daewoo Research estimates
19 | [2021 Outlook] Display Mirae Asset Daewoo ResearchDuksan Neolux (213420 KQ) Top pick
Expectations for recovery in core business and growth in new products
Investment points
(Maintain) Buy
• We lift our target price by 16% to W51,000, as we revised up our 12-month forward EPS estimate by 16%. Our
target price is based on a target P/E of 30x (unchanged).
Target price (12M, W) ▲ 51,000
• In 2021, we anticipate global flexible and rigid OLED shipments to grow 61% and 22% YoY, respectively.
• Duksan Neolux stands to benefit from 1) robust shipments of new iPhone models with flexible OLED displays
Current price (12/1/20, W) 30,900 and 2) an increase in shipments of Oppo/Vivo/Xiaomi smartphones with rigid OLED displays.
• The Korean display industry’s shift to domestic sourcing should improve visibility on revenue growth in the
Expected return 65% medium and long term.
Risk factors
• Uncertainties surrounding 1H21 utilization at Chinese customers (BOE and CSOT) with significant exposure to
OP (20F, Wbn) 37 Huawei
Consensus OP (20F, Wbn) 36
EPS growth (20F, %) 77.9
P/E (20F, x) 21.8
Market P/E (20F, x) 18.0
KOSDAQ 891.29
Market cap (Wbn) 742 190 (Dec.) 2016 2017 2018 2019 2020F 2021F
Duksan Neolux
Shares outstanding (mn) 24 KOSDAQ Revenue (Wbn) 42 100 91 98 142 169
170
Free float (%) 42.9 OP (Wbn) 4 18 20 21 37 46
150
Foreign ownership (%) 18.3 OP margin (%) 9.5 18.0 22.0 21.4 26.1 27.2
Beta (12M) 0.83 130 NP (Wbn) 5 17 19 19 34 41
52-week low (W) 20,300 EPS (W) 195 699 784 798 1,419 1,710
110
52-week high (W) 38,950 ROE (%) 4.4 14.5 14.3 12.7 19.3 19.1
(%) 1M 6M 12M 90 P/E (x) 81.8 35.2 18.1 33.0 21.8 18.1
Absolute 4.7 -4.5 46.1 P/B (x) 3.5 4.8 2.4 3.9 3.8 3.2
70
Relative -6.8 -21.2 3.8 19.11 20.2 20.5 20.8 20.11 Div. yield (%) 0.0 0.0 0.0 0.0 0.0 0.0
Notes: Under individual K-IFRS; NP is attributable to owners of the parent
Source: Duksan Neolux, Mirae Asset Daewoo Research estimates
20 | [2021 Outlook] Display Mirae Asset Daewoo ResearchAPPENDIX 1
Important disclosures and disclaimers
Two-year rating and TP history
Company Date Rating TP (W) Company Date Rating TP (W)
LG Display (034220) 12/01/20 Buy 51,000
09/09/20 Buy 21,000 09/17/20 Buy 44,000
07/24/20 Buy 18,000 05/28/20 Buy 36,000
10/23/19 Buy 20,000 10/06/19 Buy 28,000
09/01/19 Buy 22,000 09/02/19 One year 24,000
03/03/19 Buy 26,500 09/02/18 Buy 24,000
01/30/19 Trading Buy 22,500
10/24/18 Buy 22,500
Duksan Neolux (213420)
(W) LG Display (W) Duksan Neolux
30,000 60,000
25,000 50,000
20,000 40,000
15,000 30,000
10,000 20,000
5,000 10,000
0 0
Dec 18 Dec 19 Dec 20 Dec 18 Dec 19 Dec 20
Stock ratings Sector ratings
Buy Expected 12-month performance: +20% or greater Overweight Expected to outperform the market over 12 months
Trading Buy Expected 12-month performance: +10% to +20% Neutral Expected to perform in line with the market over 12 months
Hold Expected 12-month performance: -10% to +10% Underweight Expected to underperform the market over 12 months
Sell Expected 12-month performance: -10% or worse
Rating and TP history: Share price (─), TP (▬), Not Rated (■), Buy (▲), Trading Buy (■), Hold (●), Sell (◆)
* Our investment rating is a guide to the expected return of the stock over the next 12 months.
* Outside of the official ratings of Mirae Asset Daewoo Co., Ltd., analysts may call trading opportunities should technical or short-term material developments arise.
* The TP was determined by the research analyst through valuation methods discussed in this report, in part based on estimates of future earnings.
* TP achievement may be impeded by risks related to the subject securities and companies, as well as general market and economic conditions.
Ratings distribution and investment banking services
Buy Trading Buy Hold Sell
Ratings distribution 73.62% 14.11% 11.04% 1.23%
Investment banking services 72.22% 11.11% 16.67% 0.00%
* Based on recommendations in the last 12-months (as of September 30, 2020)
21 | [2021 Outlook] Display Mirae Asset Daewoo ResearchAPPENDIX 1 Disclosures As of the publication date, Mirae Asset Daewoo Co., Ltd. has acted as a liquidity provider for equity-linked warrants backed by shares of LG Display as an underlying asset; other than this, Mirae Asset Daewoo has no other special interests in the covered companies. Analyst certification The research analysts who prepared this report (the “Analysts”) are registered with the Korea Financial Investment Association and are subject to Korean securities regulations. They are neither registered as research analysts in any other jurisdiction nor subject to the laws or regulations thereof. Each Analyst responsible for the preparation of this report certifies that (i) all views expressed in this report accurately reflect the personal views of the Analyst about any and all of the issuers and securities named in this report and (ii) no part of the compensation of the Analyst was, is, or will be directly or indirectly related to the specific recommendations or views contained in this report. Mirae Asset Daewoo Co., Ltd. (“Mirae Asset Daewoo”) policy prohibits its Analysts and members of their households from owning securities of any company in the Analyst’s area of coverage, and the Analysts do not serve as an officer, director, or advisory board member of the subject companies. Except as otherwise specified herein, the Analysts have not received any compensation or any other benefits from the subject companies in the past 12 months and have not been promised the same in connection with this report. Like all employees of Mirae Asset Daewoo, the Analysts receive compensation that is determined by overall firm profitability, which includes revenues from, among other business units, the institutional equities, investment banking, proprietary trading, and private client divisions. At the time of publication of this report, the Analysts do not know or have reason to know of any actual, material conflict of interest of the Analyst or Mirae Asset Daewoo except as otherwise stated herein. Disclaimers This report was prepared by Mirae Asset Daewoo, a broker-dealer registered in the Republic of Korea and a member of the Korea Exchange. Information and opinions contained herein have been compiled in good faith and from sources believed to be reliable, but such information has not been independently verified and Mirae Asset Daewoo makes no guarantee, representation or warranty, express or implied, as to the fairness, accuracy, completeness, or correctness of the information and opinions contained herein or of any translation into English from the Korean language. In case of an English translation of a report prepared in the Korean language, the original Korean language report may have been made available to investors in advance of this report. 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The report is not to be relied upon in substitution for the exercise of independent judgment. Information and opinions contained herein are as of the date hereof and are subject to change without notice. The price and value of the investments referred to in this report and the income from them may depreciate or appreciate, and investors may incur losses on investments. Past performance is not a guide to future performance. Future returns are not guaranteed, and a loss of original capital may occur. Mirae Asset Daewoo, its affiliates, and their directors, officers, employees, and agents do not accept any liability for any loss arising out of the use hereof. Mirae Asset Daewoo may have issued other reports that are inconsistent with, and reach different conclusions from, the opinions presented in this report. The reports may reflect different assumptions, views, and analytical methods of the analysts who prepared them. Mirae Asset Daewoo may make investment decisions that are inconsistent with the opinions and views expressed in this research report. Mirae Asset Daewoo, its affiliates, and their directors, officers, employees, and agents may have long or short positions in any of the subject securities at any time and may make a purchase or sale, or offer to make a purchase or sale, of any such securities or other financial instruments from time to time in the open market or otherwise, in each case either as principals or agents. Mirae Asset Daewoo and its affiliates may have had, or may be expecting to enter into, business relationships with the subject companies to provide investment banking, market-making, or other financial services as are permitted under applicable laws and regulations. No part of this document may be copied or reproduced in any manner or form or redistributed or published, in whole or in part, without the prior written consent of Mirae Asset Daewoo. 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