UBS Investment Research
UBS Key Calls - Asia
Closing out AUO, adding LG Display
„ Reiterate bullish view on the LCD panel sector
We continue to believe the LCD sector will bottom in Q410 and start to recover in
H111. Our thesis that panel makers will perform well through the bottom of the
cycle remains intact, and we believe share prices will move ahead of the inflection
point in panel prices. We switch our Key Call from AU Optronics (AUO) to LG
Display since we think LGD has more visible catalysts in the near term to drive the
share price.
„ Catalysts ahead; remain positive on the industry cycle
Sean Kim, our analyst, believes the potential panel order from Sony in 2011 will
allow LG Display to outperform other LCD stocks. The company is also a
beneficiary of growing tablet PC demand, both as the primary supplier to Apple
and as a potential supplier to new entrants with its IPS technology and Apple
experience. For the industry as a whole, we remain comfortable that demand will
recover as long as retail TV prices are on a down-trend, while limited capacity
growth in 1H11 should help the supply-demand balance.
„ 9 live Key Calls
We have nine live Asia Key Calls—Bangkok Bank, CKI, CNBM, ICBC-H, Lanco,
LG Display, OCBC, Shriram Transport Finance, SHKP. All are Buy-rated.
