LG Display Co Ltd (LPL) 2021 Q2 法說會逐字稿

[Interpreted] Good morning. This is Daniel Lee, in charge of LG Display's IR. On behalf of the company, let me thank all the participants at this conference call.

[翻譯]早上好。我是 LG Display 的 IR 負責人 Daniel Lee。我代表公司感謝本次電話會議的所有參與者。

Today, I'm joined by the CFO, DH Suh; Heeyeon Kim, Senior Vice President of Corporate Strategy Group; Seung Min Lim, Vice President of Corporate Planning; Stephen Ko, Vice President of TV Marketing; Jae Yong Kwon, Vice President of IT Strategy Marketing; and Ki-Joon Jin, in charge of Auto Marketing.

今天，首席財務官 DH Suh 加入了我的行列；企業戰略集團高級副總裁 Heeyeon Kim；企業規劃副總裁Seung Min Lim；電視營銷副總裁Stephen Ko； IT 戰略營銷副總裁 Jae Yong Kwon； Ki-Joon Jin，負責汽車營銷。

The conference call will be conducted for 1 hour in both Korean and English, starting with a presentation on the financial results of Q2 2021 and the company's outlook for Q3, followed by Q&A.

電話會議將以韓語和英語進行 1 小時，首先介紹 2021 年第二季度的財務業績和公司對第三季度的展望，然後是問答環節。

Please refer to the IR presentation document in the company's website for more details on the financial results of Q2 2021. For those joining through the webcast, please refer to the details on the widget on your screen.

有關 2021 年第二季度財務業績的更多詳細信息，請參閱公司網站上的 IR 演示文稿。對於通過網絡廣播加入的人，請參閱屏幕上小部件上的詳細信息。

Before we begin the presentation, please take a moment to read the disclaimer.

在我們開始演示之前，請花點時間閱讀免責聲明。

Please note that today's results are based on consolidated IFRS standards prepared for your benefit and have not yet been audited by an outside auditor.

請注意，今天的結果基於為您的利益而準備的綜合 IFRS 標準，並且尚未經過外部審計師的審計。

With that said, we will now start with the presentation on Q2 2021 earnings results.

話雖如此，我們現在將開始介紹 2021 年第二季度的收益結果。

Let me start off with our business performance in Q2.

讓我從第二季度的業務表現開始。

Revenue in Q2 was KRW 6.966 trillion, up 1% Q-o-Q despite the seasonality. There was increase in TV shipments, including OLED TV and continued solid demand for IT. Operating profit was KRW 701 billion, an increase Q-o-Q, thanks to rise in LCD panel price and improvement in OLED TV profitability.

儘管存在季節性，但第二季度的收入為 6.966 萬億韓元，環比增長 1%。包括 OLED 電視在內的電視出貨量有所增加，並且對 IT 的需求持續強勁。營業利潤為 7010 億韓元，環比增長，這得益於 LCD 面板價格上漲和 OLED 電視盈利能力的改善。

Operating margin was 10%, with EBITDA margin at 25%, net profit was KRW 424 billion.

營業利潤率為 10%，EBITDA 利潤率為 25%，淨利潤為 4240 億韓元。

Next is area shipment and ASP. Area shipment in Q2 was 8.91 million square meters, up 4% from the previous quarter.

接下來是區域裝運和 ASP。第二季度出貨面積為891萬平方米，環比增長4%。

Individual panel price kept up its rising trend in Q2, led by large-sized panels, but area ASP was $703, down 4% Q-o-Q, but up 7% Y-o-Y. There was reduced shipments of mobile products owing to seasonality.

在大尺寸面板的帶動下，單塊面板價格在第二季度保持上漲趨勢，但面積平均售價為 703 美元，環比下降 4%，但同比上漲 7%。由於季節性，移動產品的出貨量有所減少。

The company's production capacity in Q2 increased 3% Q-o-Q.

公司二季度產能環比增長3%。

Next is Q2 revenue breakdown by product segment. In terms of share out of revenue, IT panel maintained its highest portion at 39%. TV panels came in next with 38%, up 7 percentage points from the previous quarter, thanks to OLED shipment growth and LCD price hike. Mobile and others accounted for 23% due to reduced shipment from seasonality.

接下來是按產品細分的第二季度收入明細。就收入份額而言，IT 面板保持最高份額 39%。電視面板緊隨其後，佔比 38%，環比上升 7 個百分點，得益於 OLED 出貨量增長和 LCD 價格上漲。由於季節性出貨量減少，移動和其他業務佔 23%。

Next is the company's financial position and ratios. The company's cash and cash equivalents at the end of Q2 was KRW 4.3 trillion. Inventory was KRW 2.723 trillion, increased by KRW 371 billion Q-o-Q as we increased the share of high value-add products and prepared for the seasonality in the second half.

接下來是公司的財務狀況和比率。公司二季度末現金及現金等價物為 4.3 萬億韓元。庫存為 2.723 萬億韓元，環比增加 3710 億韓元，因為我們增加了高附加值產品的份額並為下半年的季節性做好了準備。

Financial ratios kept showing improvement. Liabilities to equity ratio was 164%, improved by 11 percentage points. Current ratio was 96%. Net debt-to-equity ratio came in at 69%, improved by 6 percentage points Q-o-Q.

財務比率持續改善。資產負債率為164%，提高11個百分點。流動比率為96%。淨負債權益比為 69%，環比上升 6 個百分點。

Next is cash flow. Nothing was out of ordinary in the net cash flow, and cash equivalent was KRW 4.317 trillion, largely unchanged quarter-on-quarter.

其次是現金流。淨現金流無異常，現金等價物為4.317萬億韓元，環比基本持平。

Let me now move on to guidance for Q3. In Q3, area shipment is expected to grow by mid-single digit Q-o-Q. We are entering what is normally a positive seasonality, but it may be susceptible to some variability due to part supply issues. Area price is expected to rise by mid-single-digit Q-o-Q driven by the growth in mobile shipments.

現在讓我繼續進行第三季度的指導。在第三季度，地區出貨量預計將以中個位數環比增長。我們正在進入通常是積極的季節性，但由於零件供應問題，它可能會受到一些變化的影響。在移動出貨量增長的推動下，區域價格預計將以中個位數環比上漲。

Next is presentation by the company's CFO, DH Suh, on business performance and strategy.

接下來是公司首席財務官 DH Suh 關於業務績效和戰略的介紹。

[Interpreted] Good morning. This is DH Suh, CFO of LG Display.

[翻譯]早上好。我是 LG Display 的首席財務官 DH Suh。

Let me first thank all of you, all stakeholders, including our shareholders, investors and analysts for your support and interest in LG Display even as uncertainties continue from the extended impact of COVID-19. First and foremost, I wish for your health and safety.

首先，我要感謝你們所有人，包括我們的股東、投資者和分析師在內的所有利益相關者，感謝你們對 LG Display 的支持和興趣，儘管 COVID-19 的廣泛影響仍然存在不確定性。首先，我希望您的健康和安全。

I will now brief you on the company's Q2 performance.

下面介紹一下公司二季度的業績情況。

Revenue was KRW 6.966 trillion, the highest ever in Q2. Operating margin recovered to double digits and EBITDA margin at 25.4% was the highest since Q3 2009.

收入為 6.966 萬億韓元，是第二季度的最高收入。營業利潤率恢復到兩位數，EBITDA 利潤率為 25.4%，為 2009 年第三季度以來的最高水平。

Breaking down the performance by business, large OLED TV shipment in the first half was 3.5 million units, which is around 80% of last year's shipment. It has significantly bolstered its position in the premium TV market.

分業務來看，上半年大尺寸OLED電視出貨量為350萬台，約為去年出貨量的80%。它顯著鞏固了其在高端電視市場的地位。

Global OLED TV set, the actual global sales of OLED TV sets in the first half of 2021 was over 60% Y-o-Y in growth. Thanks to this development, we have been expanding our market share in the over $1,000 premium TV market.

全球OLED電視，2021年上半年OLED電視實際全球銷量同比增長超60%。由於這一發展，我們一直在擴大我們在 1,000 美元以上的高端電視市場的市場份額。

IT also kept up its improvement despite some parts supply disruptions, thanks to a solid demand for enterprise and education. The company also has strong competitiveness in both the products and customer base in IT and has been achieving solid performance.

由於對企業和教育的強勁需求，儘管部分零件供應中斷，但 IT 也保持了改進。公司在IT產品和客戶群方面也具有很強的競爭力，並取得了穩健的業績。

For our mobile business in Q2, there was some typical seasonality, but we focused on stabilizing our development, production and quality to respond to the large volume for our strategic clients in the second half.

對於我們第二季度的移動業務，有一些典型的季節性，但我們專注於穩定我們的開發、生產和質量，以應對下半年我們戰略客戶的大量需求。

Next is the company's outlook on Q3. As we move into positive seasonality, shipment growth is expected across all segments, IT to mobile. Panel shipment for OLED TV is planned at low 2 million units, while improved performance is expected quarter-on-quarter in all products of IT on the back of strong demand. In mobile, expanded production of customers' new models are expected to have positive effects.

接下來是公司對第三季度的展望。隨著我們進入積極的季節性，預計所有領域的出貨量都會增長，從 IT 到移動。 OLED電視的面板出貨量計劃在200萬台以下，而在強勁需求的支持下，IT所有產品的業績預計將環比改善。在移動領域，客戶新機型的擴大生產有望產生積極影響。

At the same time, it is believed that uncertainty remains with the prolonged impact of COVID-19 as well as issues with key parts supply. The company will strengthen market monitoring and ensure preemptive management so as to minimize volatility.

同時，相信 COVID-19 的長期影響以及關鍵零部件供應問題仍存在不確定性。公司將加強市場監測，做好先發製人的管理，盡量減少波動。

Next is on the company's strategic direction for each business.

接下來是公司各業務的戰略方向。

First is the large OLED. Large-size OLED has staked out a firm position in the premium TV market with stronger internal capability such as yield and productivity, along with enhanced product lineup and size diversification. We believe it has laid the basis for generating profit.

首先是大型OLED。大尺寸OLED在高端電視市場站穩腳跟，良率、產能等內在實力更強，產品線更豐富，尺寸更多元化。我們認為這已經為產生利潤奠定了基礎。

Going into the second half, we will try to further boost OLED TV's position in the ultra large segment, while broadening the audience specialized premium market that we have been working on. We will also identify applications beyond the existing TV market where OLED can unleash its distinct inherent value and focus our capabilities on developing them into high-margin, high-growth business.

進入下半年，我們將努力進一步提升 OLED 電視在超大細分市場的地位，同時拓寬我們一直致力於的觀眾專業高端市場。我們還將確定現有電視市場以外的應用，OLED 可以在這些應用中釋放其獨特的內在價值，並將我們的能力集中於將它們開發成高利潤、高增長的業務。

For the large OLED business, we will try to turn around to profit in the second half of the year, achieve mid-single-digit operating margin or higher in '22 and double-digit margin or higher for the longer term.

對於大型 OLED 業務，我們將努力在下半年扭虧為盈，在 22 年實現中個位數或更高的營業利潤率，並在長期內實現兩位數或更高的利潤率。

Next is POLED. The POLED business has been stabilized, thanks to improved internal capability. We have also laid the basis for a stable volume and built up a revenue structure by solidifying our trust with customers. We will work towards growing the volume and preparing for new models based on stronger partnership with customers and reinforce our revenue base by broadening our high-margin portfolio such as wearables.

接下來是 POLED。 POLED業務穩定，得益於內部能力的提升。我們還通過鞏固對客戶的信任，為穩定的銷量奠定了基礎，並建立了收入結構。我們將努力在與客戶建立更牢固的合作夥伴關係的基礎上增加銷量並為新模型做準備，並通過擴大我們的高利潤產品組合（例如可穿戴設備）來鞏固我們的收入基礎。

Third is our operational plan and strategy for LCD. Under the principle of focusing on where we are competitive, we shifted part of our capacity to high value-add IT products and we will focus our TV business on high-margin products like ultra large and commercial products. We are enhancing our mid- to long-term cooperation with major customers to build a stable operating basis, stay resilient against market changes.

第三是我們的 LCD 運營計劃和戰略。本著聚焦優勢的原則，我們將部分產能轉移到高附加值的IT產品上，電視業務將專注於超大型和商業產品等高利潤產品。我們正在加強與主要客戶的中長期合作，以建立穩定的經營基礎，保持對市場變化的彈性。

Next is on financial activities. Borrowing was reduced by around KRW 500 billion in Q2. For the mid- to long term, we will improve our financial structure and keep financial ratio stable without increasing borrowings as we maintain the principle of keeping CapEx within EBITDA.

接下來是金融活動。第二季度借款減少了約 5000 億韓元。從中長期來看，我們將在不增加借款的情況下改善我們的財務結構並保持財務比率穩定，因為我們保持將資本支出控制在EBITDA之內的原則。

Last is an update on the current discussion regarding dividend policy, one of the frequently asked questions of late. The company is currently working on a policy to use a certain percentage of the consolidated net profit as the dividend resource. Once we finalize a dividend policy that will be predictable and sustainable for the mid- to long term, we will communicate with the market without delay. We will also strengthen IR activities in the second half to better communicate with the recently increased individual shareholders. Thank you very much for your attention.

最後是關於股息政策的最新討論，這是最近經常被問到的問題之一。公司目前正在研究將合併淨利潤的一定比例作為分紅資源的政策。一旦我們確定了中長期可預測和可持續的股息政策，我們將立即與市場進行溝通。我們也會在下半年加強IR活動，更好地與最近增加的個人股東進行溝通。非常感謝您的關注。

That brings us to the end of earnings presentation for Q2 2021. We will now take questions. Operator, please commence with the Q&A session.

這使我們結束了 2021 年第二季度的收益報告。我們現在將回答問題。接線員，請開始問答環節。

(foreign language) (Operator Instructions)

（外語）（操作說明）

The first question was presented by Kim Dongwon from KB Securities.

第一個問題由KB證券的Kim Dongwon提出。

[Interpreted] First of all, congratulations on the good performance. I have one question each for LCD and OLED. But first, when we look at the revenue share, then it seems as if it is the LCD TV where the profitability is the most susceptible to change depending on the changes in the pricing. I wonder what was the share out of revenue in the second quarter of the LCD panels. And also looking ahead to the second half of the year, what do you see in terms of the price trend for the LCD panel? And then for next year, the company plans to have the LCD exit. And are there any changes to your exit strategy for LCD?

【解讀】首先祝賀你們取得了不錯的成績。我對 LCD 和 OLED 各有一個問題。但首先，當我們查看收入份額時，似乎液晶電視的盈利能力最容易隨著定價的變化而變化。我想知道第二季度 LCD 面板的收入份額是多少。另外展望下半年，您如何看待液晶面板的價格走勢？然後在明年，該公司計劃退出 LCD。你們對 LCD 的退出策略有什麼改變嗎？

And the second question is regarding OLED. Now I do agree according to the [DH Suh] presentation that the company was able to lay the basis for profitability thanks to improved cost structure in the small to midsized panels as well as the increased sales of large-sized panels. Now then, but then there are also some press reports saying that there could be a need for additional ramp-up of the Guangzhou plant or the E6 line. If that does happen, then it will increase additional cost, including depreciation and amortization. So then do you believe that if this does happen, then it could potentially delay the timing of the OLED business turning around to profit?

第二個問題是關於OLED。現在我同意 [DH Suh] 的介紹，由於中小型面板成本結構的改善以及大型面板銷量的增加，公司能夠為盈利奠定基礎。現在，但也有一些媒體報導稱，廣州工廠或 E6 生產線可能需要額外的產能提升。如果確實發生這種情況，則會增加額外成本，包括折舊和攤銷。那麼您是否認為，如果確實發生這種情況，那麼它可能會延遲 OLED 業務扭虧為盈的時間？

[Interpreted] I take it that you asked questions about the LCD followed by OLED. So let me respond to the second question first.

【解讀】我看你問的是LCD，然後是OLED。那麼我先回答第二個問題。

Now for both the large-sized OLED and small to midsized plastic OLED, doesn't the company need additional investment, meaning that it could potentially delay our turnaround to profitability is the gist of your question, as I understand it.

現在對於大尺寸 OLED 和中小型塑料 OLED，公司是否需要額外投資，這意味著它可能會延遲我們扭虧為盈的時間，這是你問題的要點，據我了解。

Now first of all, let me say that for the past few years, of course, on one hand, there was the sluggishness of the LCD market. But also, on the other hand, the company had to invest a large sum into OLED, but at the same time, was not able to have a timely mass production or secure revenue in a timely manner. That -- so these are also some of the issues that pose challenges for the company.

首先我說，這幾年，當然一方面是LCD市場的不景氣。但另一方面，該公司不得不在OLED上投入大量資金，但同時又無法及時量產或及時獲得收入。那 - 所以這些也是對公司構成挑戰的一些問題。

So then obviously, this was also an opportunity for us to remind ourselves of the very fundamental principles of making investment, especially large scale ones. In other words, for the future, whenever we make large scale investment, and this would -- the decision will be based on a various thorough and objective analysis of the status quo as well as the outlook. In other words, whether we have the capability and whether it will be possible for us to more the volume as well as profitability as a result of making investment. So again, this was a chance for us to further consolidate our principle in investment, meaning that we should move ahead with any type of large-scale investment only when such conditions are fulfilled. So no matter the type of investments, we will make sure that those principles will be fulfilled. And also, we will make sure that mass production will follow in a timely manner as well as ensuring the volume and profitability.

所以很明顯，這也是我們提醒自己投資的最基本原則的機會，尤其是大規模投資。換句話說，對於未來，每當我們進行大規模投資時，這將——決策將基於對現狀和前景的各種全面和客觀的分析。換句話說，我們是否有能力以及我們是否有可能通過投資來增加數量和盈利能力。所以，這又是一次機會，進一步鞏固我們的投資原則，也就是說，只有在具備這些條件的情況下，我們才應該進行任何類型的大規模投資。因此，無論投資類型如何，我們都將確保這些原則得以實現。此外，我們將確保及時進行大規模生產，並確保產量和盈利能力。

To sum up my answer to your question. So in our decision-making for any investment -- so obviously, this will not lead to a delay in turnaround to profit or in profitability.

總結一下我對你問題的回答。因此，在我們對任何投資的決策中——很明顯，這不會導致扭虧為盈或盈利能力的延遲。

Now regarding your second question about the LCD. So in terms of the sales, out of -- so the share out of sales for the LCD TV, of course, it depends on the quarter, but then overall, it is around 15% of the company sales. So one with a double digit.

現在關於你關於 LCD 的第二個問題。因此，就銷售額而言，液晶電視的銷售額所佔份額當然取決於季度，但總體而言，它占公司銷售額的 15% 左右。所以一個有兩位數。

Now regarding the panel price. Of course, this is an obvious point of interest for the company, and we are always closely monitoring the trends. So I understand your question to be the panel price outlook for the second half of the year and perhaps into next year. Now I remember reiterating this in the past IR session as well, but then it comes to the panel pricing, then there are largely 2 perspectives, supply and demand. And where the supply and demand dynamics meet, then that's where the price is formed. Now for the time being, for IT, we believe that the demand growth will remain solid into the second half of the year. Then the question is whether there will a point where supply exceeds demand in the near future. But when we look at the parts as well as the module readiness, then it appears likely that price will remain strong for some time.

現在關於面板價格。當然，這對公司來說是一個明顯的興趣點，我們一直在密切關注趨勢。所以我理解你的問題是今年下半年甚至明年的面板價格前景。現在我記得在過去的 IR 會議上也重申了這一點，但談到面板定價，主要有兩個觀點，供需。供需動態相遇的地方，就是價格形成的地方。目前，對於 IT，我們認為需求增長將在下半年保持穩定。那麼問題是在不久的將來是否會出現供大於求的地步。但是，當我們查看零件以及模塊準備情況時，價格似乎會在一段時間內保持堅挺。

And then, of course, looking ahead to next year, there would be various factors at play, including not the least the COVID-19. And also, we have take a look into the peers' readiness, for example, whether they have sufficient IT part supply and so forth. So at this point, it is difficult for us to decisively say what the IT panel price trend is going to be for next year. But then we will be running our business under the assumption that panel price could stabilize or even go into a downward slide.

然後，當然，展望明年，會有各種因素在起作用，其中至少包括 COVID-19。此外，我們還查看了同行的準備情況，例如，他們是否有足夠的 IT 零件供應等等。所以在這一點上，我們很難斷定明年的IT面板價格走勢是怎樣的。但隨後我們將在面板價格可能穩定甚至下滑的假設下開展業務。

Then regarding the LCD TV, especially for the 30-inch or the 33-inch, in other words, the small to midsized LCD TV. So we see that the -- sorry, 30-inch or the 43-inch, which is small to midsized LCD TV, the demand appears to be dwindling. And perhaps, of course, there could also be various factors. And one factor is COVID-19. So perhaps it has also driven down the pseudo demand. And another factor also related to COVID-19 is that -- understand that the sales of 30 or the 43-inch LCD TVs were occurring mostly in emerging markets. And now with another surge in COVID-19 in major emerging markets, including India, we understand that the retail sales are suffering. But then the question is whether this is going to be transient. In other words, whether it is only limited to the COVID-19 impact or is it more of a structural phenomenon. But we will have to wait and see and also closely monitor the situation. But our assumption is that unlike IT, demand for LCD TV is probably going to fall faster. And as a result of that, the pricing is likely to be weaker than IT.

然後是液晶電視，尤其是30英寸或者33英寸，也就是中小尺寸的液晶電視。所以我們看到——抱歉，30 英寸或 43 英寸的中小型液晶電視的需求似乎正在減少。當然，也許還有各種因素。其中一個因素是 COVID-19。所以也許它也壓低了偽需求。另一個與 COVID-19 相關的因素是——了解 30 英寸或 43 英寸液晶電視的銷售主要發生在新興市場。現在，隨著包括印度在內的主要新興市場的 COVID-19 再次激增，我們了解到零售額正在受到影響。但接下來的問題是這是否會是暫時的。換句話說，它是否僅限於 COVID-19 的影響，還是更多的是一種結構性現象。但我們將不得不拭目以待，並密切關注事態發展。但我們的假設是，與 IT 不同，對液晶電視的需求可能會下降得更快。因此，定價可能會低於 IT。

Then your next question, not sure whether I understood this correctly, but then I think you're asking about the LCD exit strategy. And let me first off say that this is actually not the right way to call it for the company.

那麼你的下一個問題，不確定我是否理解正確，但我認為你是在問 LCD 退出策略。首先讓我說，這實際上不是公司的正確稱呼方式。

Now I believe I have had the chance to repeat this point at various channels, including quarterly IR and other communication zones, regarding our -- the company's LCD operation strategy. And of course, out of our 3 major innovation projects, LCD business realignment was one of them. And our LCD structural innovation project was not about reducing or even abandoning the LCD business.

現在我相信我有機會在各種渠道上重複這一點，包括季度 IR 和其他交流專區，關於我們公司的 LCD 運營戰略。當然，在我們的 3 個主要創新項目中，LCD 業務重組就是其中之一。而我們的LCD結構創新項目並不是要減少甚至放棄LCD業務。

Now for the LCD business, the key to the LCD business realignment was to strengthen where we are differentiated, where we are competitive already. And so in our operation of the LCD business, of course, we have the LCD fab in China as well, but then what we had intended to do was to remain flexible in the utilization of the LCD fab so that from the, let's say, less competitive areas, maybe we can shift the resources to the more competitive areas as we have done so for the TV capacity.

現在對於 LCD 業務，LCD 業務調整的關鍵是加強我們差異化的地方，我們已經具有競爭力的地方。因此，在我們的 LCD 業務運營中，當然，我們在中國也有 LCD 工廠，但我們打算做的是在 LCD 工廠的利用方面保持靈活性，以便從，比方說，競爭較少的領域，也許我們可以將資源轉移到競爭更激烈的領域，就像我們為電視容量所做的那樣。

So much of the TV capacity has been shifted to IT, and there would be some additional capacity to be shifted further. So this is what we have been intending to do so that we will be able to shift the -- shift from less competitive areas to more competitive ones. Then as a result of shifting the capacity from TV to IT, does this mean that we now are able to have a stable operation of IT capacity? Have so, but then what we intend to do now is to look ahead from a more mid- to long-term perspective. That is why we are strengthening our partnership with major clients as I have explained in my presentation earlier. We remain resilient to short-term volatility or variability. And especially for the IT business of LCD, we have the technology and the competitiveness as well as the customer base and fab competitiveness. So for the LCD business, especially for the IT, we will continue to differentiate and strengthen our competitiveness and solidify our customer base.

如此多的電視容量已轉移到 IT，並且還會有一些額外的容量進一步轉移。因此，這就是我們一直打算做的事情，以便我們能夠將 - 從競爭較少的領域轉移到競爭更激烈的領域。那麼由於電視的產能轉移到IT的結果，是不是意味著我們現在可以有穩定的IT產能運作呢？有，但是我們現在打算做的是從更中長期的角度看未來。這就是為什麼我們正在加強與主要客戶的合作夥伴關係，正如我在之前的演講中所解釋的那樣。我們對短期波動或變化保持彈性。尤其是LCD的IT業務，我們有技術和競爭力，也有客戶群和代工廠的競爭力。因此，對於 LCD 業務，尤其是 IT 業務，我們將繼續差異化並加強我們的競爭力，並鞏固我們的客戶群。

So for the -- and then for the LCD TV. Now compared to the maximum level, the capacity is now about half of that. So for the LCD TV, I would say that it has become much leaner and lighter. Now then utilizing this lighter capacity, we would be focusing more on the high profitability businesses like commercial or large-sized products. And similar to IT, we would also be strengthening our partnership with the strategic clients, but they will be able to be resilient to market changes. And of course, still, it could be subject to some variability down the road. But then as I mentioned earlier, we also have the capability to have flexible operation and utilization among the different fabs. So whenever there are some changes then we would also exercise the operational agility to be flexible towards the market circumstances.

所以對於 - 然後是液晶電視。現在與最高水平相比，容量現在大約是那個水平的一半。所以對於液晶電視，我想說它已經變得更輕薄了。現在，利用這種較輕的產能，我們將更多地關注商業或大型產品等高盈利業務。與 IT 類似，我們還將加強與戰略客戶的合作夥伴關係，但他們將能夠適應市場變化。當然，它仍然可能會在未來發生一些變化。但是正如我之前提到的，我們也有能力在不同的晶圓廠之間進行靈活的操作和利用。因此，每當出現一些變化時，我們也會運用運營靈活性，以靈活應對市場環境。

(foreign language) The following question will be presented by Kim Hyun-soo from Hana Financial Investment.

(外語) 下面的問題將由韓亞金融投資的金賢洙提出。

[Interpreted] I have two questions, and one is regarding the EBITDA guidance because it was mentioned earlier in the presentation that the company will maintain the principal, that the CapEx execution will remain within EBITDA. And then, of course, because of the higher earnings expected for this year and next, perhaps it would be difficult for you to give us a definitive response to this, but then what would be the EBITDA guidance for this year and next? And the second question is for CapEx. Now there are talks of POLED ramp-up in response to IT demand and also further investment in mobile area as well. And regarding the investment, you have been conservative and even now your response has been conservative. And of course, we do understand that this requires cautious review and decision making. So I also do understand that it would be difficult to give a conclusive response at this point. But do you believe that investing into the POLED ramp-up would be necessary?

[解釋] 我有兩個問題，一個是關於 EBITDA 指南，因為在演示文稿前面提到公司將維持本金，資本支出執行將保持在 EBITDA 範圍內。然後，當然，由於今年和明年的預期收益更高，您可能很難對此給我們一個明確的回應，但是今年和明年的 EBITDA 指導是什麼？第二個問題是關於資本支出的。現在有關於 POLED 的增長以響應 IT 需求的討論，以及對移動領域的進一步投資。而對於投資，你一直是保守的，甚至現在你的反應也是保守的。當然，我們明白這需要謹慎的審查和決策。所以我也明白，現在很難給出結論性的回應。但是您認為有必要投資 POLED 產能提升嗎？

[Interpreted] Well, first, regarding the EBITDA guidance. Now as it stands today, the company's depreciation and amortization for this year and also will be similar for next year, but it would be around KRW 4.5 trillion. So then assuming that there is going to be a [BEP] in the second half of the year, then KRW 4.5 trillion plus operating profit of KRW 1.1 trillion would be about KRW 5.7 trillion. Of course, at this point, we cannot pinpoint what the operating profit is actually going to be in the second half. But then looking at the market expectations, then perhaps that is where it is going to be. But then with the KRW 4.5 trillion in depreciation and amortization, then also with the operating profit, then I would say that the EBITDA would be around KRW 5 billion to KRW 6 billion, and that is what we need to achieve, and I believe that, that would be achievable.

[解釋]嗯，首先，關於 EBITDA 指南。按照今天的情況，公司今年和明年的折舊和攤銷將相近，但約為 4.5 萬億韓元。因此，假設下半年將有 [BEP]，那麼 4.5 萬億韓元加上 1.1 萬億韓元的營業利潤將約為 5.7 萬億韓元。當然，在這一點上，我們無法確定下半年的實際營業利潤是多少。但看看市場預期，也許這就是它的發展方向。但加上 4.5 萬億韓元的折舊和攤銷，再加上營業利潤，我想說 EBITDA 將在 50 億至 60 億韓元左右，這就是我們需要實現的目標，我相信，那是可以實現的。

For the plastic OLED, especially investment in IT and mobile, what I can tell you at this point is that these issues are under review at this time. There has been some progress in the review. So once we have something final and concrete to share with the market, we will do so without delay. I would like to ask for your patience a bit longer.

對於plastic OLED，尤其是IT和mobile方面的投資，我現在可以告訴你的是，這些問題目前正在審查中。審查取得了一些進展。因此，一旦我們有最終和具體的東西要與市場分享，我們就會毫不拖延地這樣做。我想再請您耐心等待一下。

We will take the next question.

我們將回答下一個問題。

(foreign language) The following question will be presented by Woo Dong-je from Bank of America.

(外語) 以下問題將由美國銀行吳東濟提出。

[Interpreted] Also, congratulations on the excellent performance that makes me also feel a lot better. Regarding the quarterly performance, then I see that the number one contributor to the quarterly earnings this time was once again the LCD despite the seasonality. And it appears as if the company feels that it is also in a good position with the LCD, perhaps because of its differentiation. But then now looking at the IT use LCD, for example, with the oxide. Now what are the reasons, if any, that the companies in Taiwan, Japan or China not do as well as the company today?

[解讀]另外，恭喜你出色的表現讓我也心情好了很多。至於季度表現，那麼我看到這次季度盈利的頭號貢獻者再次是液晶顯示器，儘管有季節性。而且似乎該公司覺得它在 LCD 方面也處於有利地位，也許是因為它的差異化。但是現在看著 IT 使用 LCD，例如，與氧化物。如果有的話，台灣、日本或中國大陸的公司沒有像今天的公司那樣做的原因是什麼？

And also looking at China, then it seems as if they are making large-scale investments not only Gen 8 LCD but now in Gen 10 LCD. This means that the LCD TV price, which had gone up by over 100% recently is now at the risk of falling dramatically. Of course, the company mentioned its response strategy, for example, strengthening its partnership with the strategic clients and also strengthening the differentiation. But still, when we look at the history of LCD so far, especially for the past 10 years, then whenever there has been an oversupply, then without exception, it led to plummeting prices. So perhaps that is a risk that could materialize as early as the end of this year or next year.

再看看中國，他們似乎不僅在 Gen 8 LCD 上而且現在在 Gen 10 LCD 上都在進行大規模投資。這意味著，近期漲幅超過100%的液晶電視價格面臨大幅下跌的風險。當然，公司也提到了自己的應對策略，比如加強與戰略客戶的合作，也加強差異化。但是，當我們回顧 LCD 迄今為止的歷史，尤其是過去 10 年的歷史時，每當出現供過於求的情況時，無一例外都會導致價格暴跌。因此，這種風險可能最早會在今年年底或明年出現。

So I would say that, that could be one of the biggest risks for the company. And what can the company do regarding this potential risk. And then also it appears -- this is the last question. And it seems the facility investment has been consistently going over KRW 1 trillion for every quarter. But from my perspective about KRW 500 billion to KRW 600 billion of facility investment per quarter would be sufficient. So because the EBITDA is growing, does this mean that we also have to increase the facility investment in correspondence to the growth in EBITDA? Or perhaps it could stabilize the CapEx at around KRW 3 trillion per year. And then for the surplus EBITDA, maybe we can utilize that as free cash flow then perhaps use that for the CD conversion or use that for share buyback to assure the shareholders, perhaps that would be a better strategy than providing cash dividend?

所以我想說，這可能是公司面臨的最大風險之一。公司可以針對這種潛在風險做些什麼。然後它也出現了——這是最後一個問題。而且似乎每個季度的設施投資都持續超過 1 萬億韓元。但從我的角度來看，每季度5000億至6000億韓元的設施投資就足夠了。那麼，由於 EBITDA 正在增長，這是否意味著我們也必鬚根據 EBITDA 的增長而增加設施投資？或者它可以將資本支出穩定在每年 3 萬億韓元左右。然後對於盈餘 EBITDA，也許我們可以將其用作自由現金流，然後也許將其用於 CD 轉換或將其用於股票回購以向股東保證，也許這會是比提供現金股息更好的策略？

[Interpreted] Regarding your first question about the differentiation of IT products. And I understand that your question was about the competitors in China, Taiwan or Japan. And of course, that some are utilizing IPS and some are also utilizing oxide or some for certain products. But I understand that there is still some entry barrier, especially in infrastructure or the development process. Of course, it's -- I'm not in the position to tell you what the other players are thinking or what their judgment is. But then as far as I understand at this point, there is still quite a high entry barrier.

【解讀】關於你第一個關於IT產品差異化的問題。我知道你的問題是關於中國、台灣或日本的競爭對手。當然，有些正在使用 IPS，有些也在使用氧化物或某些產品。但我知道仍然存在一些進入壁壘，尤其是在基礎設施或開發過程中。當然，我不能告訴你其他球員在想什麼或他們的判斷是什麼。但是據我目前的了解，進入門檻仍然很高。

And for the LCD TV price potentially falling and how the company intends to respond to this potential risk. Now as we had reiterated earlier, the challenges for the company last year and the year before, not about the LCD itself because for the LCD business, although the -- let's say, for the LCD, the sales were falling, but still, we were never in the red with the LCD. So it was not actually the LCD business itself that was because of the company's challenges but rather for the large-sized OLED or the plastic OLED. After making the investment, we were not able to go on our scheduled track, the batch production and sales. As a result, we were amassing large sized deficits. So those were the biggest cause of our difficulties over the past few years. And now these issues are largely going away. And now what are we going to do about the LCD potential risks. Now regarding the potential fall in the prices, we have our scenario planning, and we would be making preparation in accordance with the scenarios. And for the LCD panel capacity, I have already mentioned that the capacity has been halved already. Then I also mentioned strengthening our partnership with strategic clients, and this is to assure operational stability down the road. And as for the fab for the LCD, we have the Paju P7 as well as the Guangzhou LCD fab, but these are where we are able to make the LCDs for TV. And we will continue to ensure operational stability in these fabs as well so that we will be able to flexibly respond to the changes. So we would be -- so in line with that strategy, we would also be responding to the price in LCD -- the price drop in the LCD TV whenever that happens so that we will be able to ensure mid- to long-term profitability in the LCD business.

以及對於液晶電視價格可能下跌以及公司打算如何應對這一潛在風險。現在正如我們之前重申的那樣，公司去年和前年面臨的挑戰，與 LCD 本身無關，因為對於 LCD 業務，雖然 - 比方說，對於 LCD，銷售額正在下降，但我們仍然液晶顯示器從來沒有出現過紅色。因此，公司面臨的挑戰實際上並不是 LCD 業務本身，而是大尺寸 OLED 或塑料 OLED。投資之後，我們無法走上預定的軌道，批量生產和銷售。結果，我們積累了大量赤字。因此，這些是過去幾年我們遇到困難的最大原因。現在這些問題基本上都消失了。而現在我們要如何應對LCD的潛在風險。現在對於可能出現的價格下跌，我們有我們的情景規劃，我們會根據情景進行準備。至於液晶面板的產能，我已經提到產能已經減半了。然後我還提到加強我們與戰略客戶的伙伴關係，這是為了確保未來的運營穩定性。至於LCD工廠，我們有坡州P7和廣州LCD工廠，但這些是我們能夠生產電視LCD的地方。我們也將繼續確保這些晶圓廠的運營穩定性，以便我們能夠靈活應對變化。所以我們會——所以根據這個策略，我們也會對 LCD 的價格做出反應——只要發生這種情況，LCD 電視的價格就會下降，這樣我們就能夠確保中長期的盈利能力在 LCD 業務中。

Your next question was regarding some concerns about the company's pattern in facility investment, I would say. Now let me reiterate that when we said that we will maintain the principle of CapEx execution within EBITDA, does not mean that we will use up all the EBITDA that we earn. So of course, it would be best if it can stay within the depreciation and amortization level. And for this year, that is what the company intends to do. Our CapEx would be within the depreciation and amortization level. And then now for the additional EBITDA or the incremental EBITDA, we can use it to lower our borrowings or further consolidate our financial structure as we have done this time around.

我想說，你的下一個問題是關於對公司設施投資模式的一些擔憂。現在讓我重申，當我們說我們將在 EBITDA 內維持資本支出執行原則時，並不意味著我們將用盡我們賺取的所有 EBITDA。所以當然，如果能保持在折舊和攤銷水平之內就最好了。今年，這就是公司打算做的。我們的資本支出將在折舊和攤銷水平之內。然後現在對於額外的 EBITDA 或增量 EBITDA，我們可以用它來降低我們的借款或進一步鞏固我們的財務結構，就像我們這次所做的那樣。

Then, of course, for next year and on, if there are any strategic investments that are necessary, especially for the purpose of future growth drivers or to ensure future profitability, then those are necessary investments that we will make. But other than that, we would remain, of course, tight in our investment. I believe that the implication in your question was that perhaps the company was a bit, let's say, going overboard with our investment. And I would like to assure you that no, that is not the case. And some of the CapEx needed this year was to build a stronger safety environment in relation to the ESG management and also to preemptively prepare for the future.

然後，當然，對於明年及以後，如果有任何必要的戰略投資，特別是為了未來的增長動力或確保未來的盈利能力，那麼這些都是我們將進行的必要投資。但除此之外，我們當然會保持緊張的投資。我相信你的問題的含義是，也許公司有點，比方說，對我們的投資有點過頭了。我想向你保證，不，事實並非如此。今年需要的一些資本支出是為了建立一個更強大的與 ESG 管理相關的安全環境，並為未來做好先發製人的準備。

I would like to explain that what we are doing in terms of the preparation is a bit different from what we have done in the past. So it's more of an aggressive preemptive preparation for the future. And of course, for the EBITDA, yes, this will remain as the large, let's say, a threshold for the CapEx. And then aside from the strategic investments, we would remain tight in our investment operation. And we will continue to strengthen our financial structure and also leave room for some strategic financial operation for future preparation as well.

我想解釋一下，我們正在做的準備工作與我們過去所做的有點不同。因此，這更像是對未來的積極先發製人的準備。當然，對於 EBITDA，是的，這將仍然是資本支出的一個很大的門檻。然後除了戰略投資外，我們將在投資業務上保持緊張。我們將繼續加強我們的財務結構，並為未來的準備工作留出一些戰略性財務運作的空間。

We will take one last question.

我們將回答最後一個問題。

(foreign language) The last question will be presented by Kim Sung Kyu from Daiwa Securities.

（外語）最後一個問題將由大和證券的Kim Sung Kyu提出。

[Interpreted] I have two questions. One is about the OLED TV. You see that the sales in the first half for the OLED TV were quite high. And in the second half, considering the positive seasonality, I believe that it is more than likely that the company will be able to achieve the target of 1 million -- 8 million units. And then for -- but then for the LCD TV, as was mentioned earlier, it is likely that demand is going to fall earlier than expected, which could then have an impact on the demand and pricing as well. So then in addition to this, regarding the OLED TV, does the company believe that there are also some, let's say, pressure -- downward pressure on the pricing so that you will be able to achieve the target for the second half of the year? So do you believe that there is such a risk of the downward pressure on the OLED TV pricing?

[已翻譯] 我有兩個問題。一個是關於OLED電視。你看上半年OLED電視的銷量還是挺高的。而在下半年，考慮到積極的季節性因素，我相信公司很有可能實現 100 萬——800 萬台的目標。然後 - 但對於 LCD 電視，如前所述，需求可能會比預期更早下降，這也會對需求和定價產生影響。那麼除此之外，關於OLED電視，公司是否認為還有一些壓力 - 價格下調壓力，以便您能夠實現下半年的目標？那麼您認為OLED電視定價存在下行壓力的風險嗎？

And the second question is, it seems as if this year, the shipment is to double, then of course, in the Guangzhou fab, there is an additional capacity of 30,000 that is available. But then for next year, then what is the company's target capacity. And there are stories of target shipments, but there are talks of 10 million or even 11 million. So could you give us a guidance about your new target shipment next year? And then the second question is about the automotive display business because in the first half, there have been a lot of issues regarding the automotive semiconductor supply. And in the second half, we see that the issue has been somewhat eased for EVs. But overall, the semiconductor supply issues continue and perhaps all the way into late this year as well. So I would just like to ask for the company's update on the automotive display business as well as OLED?

而第二個問題，好像今年出貨量要翻一番，那當然廣州廠還有30000的額外產能。但是對於明年，公司的目標產能是多少。並且有目標出貨量的故事，但也有傳言是 1000 萬甚至 1100 萬。那麼您能否就明年的新目標出貨量給我們一個指導？然後第二個問題是關於汽車顯示業務，因為在上半年，汽車半導體供應方面存在很多問題。在下半年，我們看到電動汽車的問題有所緩解。但總的來說，半導體供應問題仍在繼續，而且可能一直持續到今年年底。所以我想問一下公司在車用顯示業務以及OLED方面的最新情況？

[Interpreted] First question was, I believe, on the pricing of OLED in relation, especially to the LCD price. So whether the fall in the LCD price will come around to affect the OLED price, especially what is also going to be the shipment for next year? Now for the first question about the pricing. Yes, it is true that because the LCD and OLED are the 2 leading panels for TV, they tend to exchange impact with each other. But as you would also know, for the LCD TV, while the price for the LCD TV has close to doubled compared to last year, it has actually not affected the OLED TV pricing much. And that is because we set the OLED pricing not in relation to the LCD, but based on a very thorough market research.

[解讀] 我認為第一個問題是關於 OLED 的定價，尤其是 LCD 的價格。那麼LCD價格下跌是否會轉而影響OLED價格，尤其是明年的出貨量又將如何？現在關於定價的第一個問題。是的，確實，因為 LCD 和 OLED 是電視的兩個主要面板，它們往往會相互交換影響。但大家也知道，對於液晶電視來說，雖然液晶電視的價格比去年翻了將近一倍，但其實對OLED電視的定價影響不大。那是因為我們設定的 OLED 定價與 LCD 無關，而是基於非常徹底的市場調查。

So based on the market research, then we try to determine the sweet spot in terms of the OLED TV pricing that would be acceptable to as many consumers in the market as possible. And then based on this, we also discussed the panel pricing with the customers, with the set makers. And -- because of this, of course, the changes in the LCD price could have some impact on the OLED price as well. But then this will not directly affect the price because we look to the market to come up with the acceptable -- appropriate pricing. So given this situation, we believe that any changes in the LCD pricing in the future, but despite that, we would be able to manage the OLED price.

因此，根據市場調查，我們會嘗試確定市場上盡可能多的消費者可以接受的 OLED 電視定價的最佳點。然後在此基礎上，我們還與客戶，與設備製造商討論了面板定價。而且——因此，當然，LCD 價格的變化也可能對 OLED 價格產生一些影響。但這不會直接影響價格，因為我們希望市場能給出可接受的——適當的定價。因此，鑑於這種情況，我們相信未來 LCD 定價的任何變化，但儘管如此，我們將能夠管理 OLED 價格。

Then regarding the OLED shipment for next year. Now of course, we are in the preparation for this. But yes, we do have the capacity of additional 30,000 in Guangzhou. And based on that, we can ship 10 million next year. And also with some enhanced productivity and other preparation, we could also potentially ship 11 million the year after that.

然後關於明年的OLED出貨量。當然，現在我們正在為此做準備。但是，是的，我們確實有能力在廣州增加 30,000 個。基於此，我們明年可以出貨 1000 萬台。此外，通過提高生產力和其他準備工作，我們也有可能在那之後的一年出貨 1100 萬台。

Next about the auto display. Now it is true that there have been semiconductor shortage issues, especially among the OEMs and the Tier 1 suppliers. They have been intermittent, and some have been in large-scale shortage. So yes, for the company, it is also a risk. But then so far, there have been no disruptions in our production because of shortage of the semiconductors. But still, yes, as you have mentioned, it is a risk. And we are always remaining vigilant regarding the risk of parts shortage, not only for the company but also for our clients as well. So we will keep a very close eye on the situation so that we will be able to manage any circumstances or changes so that we will not be losing out on valuable opportunities.

接下來關於自動顯示。現在確實存在半導體短缺問題，尤其是在 OEM 和一級供應商之間。它們斷斷續續，有的已經大規模短缺。所以是的，對於公司來說，這也是一種風險。但到目前為止，我們的生產沒有因為半導體短缺而中斷。但是，是的，正如您所提到的，這是一種風險。我們始終對零件短缺的風險保持警惕，不僅是為了公司，也是為了我們的客戶。因此，我們將密切關注局勢，以便我們能夠應對任何情況或變化，這樣我們就不會失去寶貴的機會。

And some update on our overall LCD business operation. Now so far for the auto panels, they have been based on amorphous. But then we have been shifting to LTPS, at least for the LCD. And then the orders that we are receiving recently for LCD are mostly LTPS. Then for the next 2 to 3 years, once we finish supply of the LCD based on amorphous for the next 2 to 3 years, and we believe that we will no longer be producing based on the amorphous technology. And from then on, it would be solely LTPS for LCD.

以及我們整體 LCD 業務運營的一些更新。到目前為止，對於汽車面板，它們都是基於非晶的。但後來我們一直在轉向 LTPS，至少 LCD 是這樣。然後我們最近收到的 LCD 訂單主要是 LTPS。那麼未來2到3年，一旦我們完成未來2到3年基於非晶的LCD供應，我們相信我們將不再基於非晶技術生產。從那時起，LCD 將完全是 LTPS。

And for the plastic OLED, we believe that this is the panel that is optimized for electric vehicles. And we have been trying to increase the orders received for plastic OLED. And especially for the EV OEMs and also new OEMs and some of the OEMs that are preparing to enter the EV. So we are trying to target them for the plastic OLED. But then yes, for the plastic OLED as well as the large-size OLED, we believe that it is important to first define the right target segment and then try to improve the profitability and also the business visibility of the auto display. So we need to create the kind of mechanism that will allow us to ensure profitability in this business as well. So again, we are focusing on receiving the orders for the plastic OLED, and this is our strategic focus at this moment. Once we get good results in this front, then we would also communicate this with the market in due time.

而對於塑料 OLED，我們認為這是為電動汽車優化的面板。我們一直在努力增加塑料 OLED 的訂單。特別是對於 EV OEM 以及新 OEM 和一些準備進入 EV 的 OEM。所以我們正試圖將它們作為塑料 OLED 的目標。但是，是的，對於塑料 OLED 以及大尺寸 OLED，我們認為重要的是首先定義正確的目標細分市場，然後嘗試提高汽車顯示器的盈利能力和業務知名度。因此，我們需要創建一種機制，使我們也能夠確保該業務的盈利能力。因此，我們再次專注於接收塑料 OLED 的訂單，這是我們目前的戰略重點。一旦我們在這方面取得了不錯的成績，那麼我們也會適時與市場進行溝通。

(foreign language) We will now close Q2 2021 earnings conference call for LG Display. Thank you once again for joining us today. Please do contact us at the IR team for any additional questions. Thank you.

（外語）我們現在將結束 LG Display 2021 年第二季度財報電話會議。再次感謝您今天加入我們。如有任何其他問題，請聯繫 IR 團隊。謝謝。

[Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]

[此記錄中標記為 [已翻譯] 的部分由現場通話中的口譯員說出。]