LG Display Co., Ltd.
Q1 2015 Earnings Call Transcript

Published: 24 Jul 2015

[Operator:]

Good morning and good evening. First of all, thank you all for joining this conference call. And now we will begin the conference of the Fiscal Year 2015 Second Quarter Earnings Results by LG Display. This conference will start with a presentation, followed a division of Q&A session. [Operator Instructions] Now we shall commence the presentation on the fiscal year 2015 second quarter earnings results by LG Display.

[Hee Yeon Kim:]

Welcome to LG Display second quarter year 2015 conference call. My name is Hee Yeon Kim, Head of IR Division. I would like to welcome everyone to our quarterly earnings conference call. I am joined by our IR staff as well as representatives from market intelligence and IT mobile marketing. Steven Co [ph] is Head of Market Intelligence Division. Sang Choi [ph] is Head of IT Mobile Marketing Division. Next slide please. Before we move on to the earnings results, please take a minute to read the disclaimer. I would like to review everyone that results are based on consolidated K-IFRS accounting standards and are unaudited. Next slide please. We have approximately one hour for this conference call. During the first part of the call, I would like to highlight our second quarter results performance and third quarter outlook, which corresponded to the slides available on our website. Afterwards we will take questions. Moving on to revenue and profits on the next two slides. Our revenue in the first quarter decreased 4% quarter on quarter, recording KRW6.7 trillion. Due to economic uncertainty, we have witnessed a slowdown in the end-demand, resulting in set-makers' conservative approach to adjust inventory during second quarter. With the panel price decline, which reflected the weak demand, especially in IT segments and [inaudible] segment below 40-inch category. Third, with the continued TV size migration trend and increased portion of our advanced in-cell technology base smartphone and customer base, our revenue grew 12% Y-o-Y basis. Due to the mix changes towards larger-sized TVs and increasing the portion of our AIT smartphone products, we have seen a minor branded ASP decline, and resulting in an operating profit of KRW488 billion. Operating margin was 7%. EBITDA margin was 20%. Pretax profit was KRW507 billion and net profit was KRW363 billion. Moving on to Slide 5, looking at our financial position and ratios, at the end of first quarter, the total asset was KRW22.5 trillion, liability KRW9.8 trillion, and equity KRW12.6 trillion. Cash and cash equivalents was KRW2.7 trillion and inventory decreased to below KRW2.6 trillion. As our liability decreased by KRW459 billion, liability to equity ratio and [inaudible] ratio improved this, recording 78% and 144%. Net debt to equity ratio was 11%, maintaining our healthy situation. Moving on to Slide 6, looking at our cash flow. Cash at the beginning of second quarter was KRW2.7 trillion. Cash flow from operating activities resulted in cash inflow of KRW640 billion, while cash flow from investing activities resulted in an outflow of KRW620 billion. All in all resulting in cash at the end of the quarter with KRW2.7 trillion. Moving on to Slide 7, I would like to go over our performance highlights. During second quarter, our area shipment was flat Q-o-Q, recording 9.8 million square meters, which was a bit below our guidance, due to mix [inaudible] uncertainties and [inaudible] we have witnessed order changes from our customers reflecting those uncertain market situations. Despite weak [ph] demand situation, continued larger size trend in TV segment, as well as increasing portion of our advanced in-cell touch smartphones broadening our customer base, was a positive factor during second quarter. With the order adjustment from the set-makers, accordingly, major inventory correction started during the second quarter. Thus, we expect the inventory situation to be stabilized during the third quarter. Regards to pricing, panel price for IT segments and small to midsize TVs [inaudible] category showed a downward trend due to weak demand. However, as explained earlier, our blended ASP per square meter decrease was limited to 5% quarter on quarter due to continuous larger size trend in TV segment and increase in advanced in-cell touch product in our customer base. Moving on to our product mix on Slide 8. Our TV business was 40% of our total revenue, followed by mobile applications 28%, monitor 16%, and the remaining 16% was for combined notebook/tablet segment. Due to the slow demand in the mid to larger-size segment, TV monitor and notebook/tablet segment revenue portion declined 1 percentage point each. On the other hand, with the increase in AIT-based smartphone and meaningful mix expansion, the third portion of the mobile segment increased 3 percentage points quarter on quarter, resulting in 28%. Moving on to Slide 9 and looking at our capacity, our production capacity in second quarter was 12.3 million square meters, remaining quite flattish versus the previous quarter. Next, we come to our outlook section. Lastly, I would like to share our outlook for Q3 and second half. For the third quarter, we expect total area shipment in square meters to remain flat versus previous quarter due to our limited capacity, as well as the conservative order trend from set-makers, resulting from the underlying macro and demand uncertainties. But with the continued larger-size trend in TV segment, our production and unit shipment for TV is expected to decrease quarter on quarter due to those mix changes towards larger-size production impacting the market supply and demand situation in a positive way. As for prices, we expect panel prices to continue to a downturn trend, although price fluctuation may vary among panel-makers depending on the supply/demand situation of each segment and prices. For example, 48-inch has been showing a deep price decline while 43 and 49 inches, which was focusing on -- we are focusing on, is showing a relative market price declining trend. We will implement a flexible production operation and utilization adjustment strategy based on market situation. Also we will more proactively focus on OLED market and customer expansion. Our decision to invest in the Gen-6 plastic OLED is in line with our strategy for those structural future preparations to go OLED. Looking at the market environment, there are concerns about continuing uncertainties, but there could also be upside potentials such as continuing size migration trend, especially in TV, increasing portion of specialty products such as IPS and AIT, and business favorable FX movements, as well as the expectation of a healthy environment to come during third quarter resulting from set-makers' OLED inventory adjustment from second quarter. Therefore, we are watching the market situation very favorably to flexibly adjust our spend [ph] mix, operation and utilization based on the market changes, as to maximize our profit generation. That's the end of our presentation. Let's have the Q&A session.

[Operator:]

Now Q&A session will begin. [Operator Instructions] The first question will be provided by Nicolas Gaudois from UBS. Please go ahead, sir.

[Nicolas Gaudois:]

Yes, hi. Good morning. A couple of questions. First, you talked yesterday about converting some amorphous silicon capacity to AICPS. Maybe if you could elaborate a little bit on the rationale for that, and what is the timeline for this conversion? And also, in addition to that, you [inaudible] plans to add more capacity after this for high-end mobile display. And secondly, as things stand after the recent [inaudible] in underlying pricing, if you could, referring back to Q2, rank qualitatively the profitability of each segment for your business to be quite useful. Thank you very much.

[Hee Yeon Kim:]

Our plastic OLED flat convergence takes two years, be longer than before. In case of 35K amorphous silicon facility, can be converted into 10.5K LTPS plastic OLED. For the furtherc conversion plan, it's not decided yet. But anyway, if plastic OLED facility is very brand-new to support the different design for different segmentation, so it will take a longer time than the historical conversion production plan. And for the profitability for each segmentation, in case of TV and monitor, which is quite higher than our average margin, but the other side, notebook, tablet and mobile, is much lower than our average margin.

[Nicolas Gaudois:]

Okay. Thank you.

[Operator:]

The following question will be presented by Rob Stone from Cowen & Co. Please go ahead, sir.

[Rob Stone:]

Hi. Thanks for taking my questions. I had a couple of questions on OLED capacity as well. So the new line that you announced today or yesterday, 7,500 substrate starts, is that a phase one to expect that facility might ultimately have more than 7,500 substrates per month?

[Hee Yeon Kim:]

We anticipate 7-1/2K, yes. It is the first phase of our plastic OLED to support [inaudible] display. So if we are -- we will have foundry [ph] migration, we will consider another place, but it's not decided yet.

[Rob Stone:]

Okay. And then with respect to the capacity expansion that was planned for OLED TV this year, can you provide any update on how that's progressing from the 14,000 towards the 34,000 substrates?

[Hee Yeon Kim:]

Yes. It is in line with our previous communication, another 20K will be added in second half. The production will be starting in the middle second half this year. Totally our OLED TV capacity 34K.

[Rob Stone:]

Great. And how is the shipment trend for OLED TV panels for the second quarter or the first half so far?

[Hee Yeon Kim:]

Shipment trend will be quite significant. During the first half our shipment was very small because during first quarter, as you already know, we have some issue to start the OLED production line, and actually we start to provide the ultra-high definition [inaudible] TV sets from second quarter [inaudible] scale is not that big. But in second half, in accordance with our 20K additional production, our shipment will increase significantly from -- in the middle of second half.

[Rob Stone:]

Can you quantify any more precisely the panel shipped in the second quarter for TV?

[Hee Yeon Kim:]

Actually around 80% will be planned to be in second half, for the full total --

[Rob Stone:]

Okay. About 80% of the plan for the year, in the second half. Great. Thank you very much.

[Operator:]

The next question will be given by Andrew Abrams from SCMR. Please go ahead, sir.

[Andrew Abrams:]

Hi. Thank you for taking the question. Can you repeat what you said about ASPs for third quarter? It was very difficult to hear. I thought you said ASP is down 5%, but I just want to make sure that's correct.

[Hee Yeon Kim:]

Our ASP 5% is blended ASP. And then third quarter, we are expecting individual panel price to continue to decline, but it's quite different based on size and application. In case of above -- 40 and above size, panel price decline still is very slow versus 32-inch. And in case of IT panel price, it has declined significantly, so we are expecting stabilized in the middle of third quarter. So all in all, together with the mix trend, our blended ASP would not decline in third quarter.

[Andrew Abrams:]

Okay. Thank you.

[Operator:]

Currently there are no participants with questions. [Operator Instructions] Next question will be given by Sanji Brana [ph] from CLSA. Please go ahead, sir.

[Unidentified Participant:]

Hi. Good morning everyone. I have three short questions for you. First is on ForEx. What was the impact of ForEx on your earnings in the second quarter? And how do you see it in second half of this year given the Korean won has weakened? My second question is that you alluded to cost savings and flexible production in the second half of this year. Could you a little bit explain a bit more about that? And my third question is, what are you expecting the product mix in the second half, like just any segments that you expect to do well?

[Hee Yeon Kim:]

In case FX impact in the second quarter, it was very limited. Actually in case of average FX change, it was flattish. So there's no positive FX impact in second quarter for our operating side. But in case of recording profit side, we have some operating, we have some FX valuation gains because right now our U.S. dollar debt decreased significantly while our U.S. dollar asset is much higher than U.S. dollar debt. So we have some deliberation gain under the recurring side. In second quarter, although we have significant cost reduction in first quarter, because of our second quarter cost reduction was very limited, very low [inaudible]. And our product mix. Our product mix is expected to be similar at second quarter and second half.

[Unidentified Participant:]

Thank you.

[Operator:]

The next question will be presented by Claire Kyung Min Kim from Daishin Securities. Please go ahead, ma'am.

[Claire Kyung Min Kim:]

Good morning. Thank you for taking my question. The first question is about fab allocation. As far as I know, LG Display already has OLED panel fab and small-size OLED fab in Paju, which is in the northern part of Korea, and now it seems that your company started to establish new next-generation OLED fab in Koonyi [ph] which is in the southern part of Korea. But as far as I know, there are some spaces still remaining in Paju. So, can you give us any colors on your strategy decision on the fab allocation between these two places, in regard of the OLED investment?

[Hee Yeon Kim:]

If you look at our small size business, our small -- most of the small size business was done by Kunmi [ph] area which is the southern part of Korea, so that's why we choose our flat OLED facility for northern part of Korea -- certain part of Korea.

[Claire Kyung Min Kim:]

Okay, thank you. And my next question is about your company's outlook for panel prices, because last year when your company decided to reduce the production of IT panels which are mostly monitor and notebook, that decision actually had a big impact -- big positive impact on the panel price movement in the first half of last year to the second half of last year. And now your company tries to reduce the TV panel production in terms of the unit shipments. So, do you believe that your company's decision can have a positive impact on the panel prices in the second half of this year, although there are new capacity increase from Chinese competitors, which is different aspect from the last year?

[Hee Yeon Kim:]

Your question is very great. Yes, we think -- last year we did the successful story of converting IT facility into ATPS [ph]. So, in second half this year, we will reduce our facility again to support the bigger screen TV demand. It is a success story from last year. So our production should be limited for IT segmentation. So we hope it'll be favorable for IT cost trend. [Inaudible] of this kind of trend, actually notebook price [inaudible] to the loss-making level from -- for the industry-wide. So the IT panel price should be stabilized when you look at our competitors and industry profit generation situation. In case of China, Chinese competitor facilities mostly focus on the TV side, so this is a different story. Chinese facility will be used to put TV, which is the supply expansion. However, as you already understand, size migration give us a chance to reduce production. Actually in third quarter, LG Display third quarter TV shipment will decline even though the area [inaudible] the size migration impact will mitigate the Chinese expansion.

[Claire Kyung Min Kim:]

Okay. Thank you.

[Operator:]

The following question will be presented by Eric Lin from CIMB. Please go ahead, sir.

[Eric Lin:]

Hi, Hee Yeon. Can you remind us the CapEx number this year and how would you break it down into OLED, LCD and maintenance?

[Hee Yeon Kim:]

This year CapEx should be similar with last year at around KRW3 trillion level. Maybe 30% will be used for OLED [inaudible] preparation and the remaining percentage will be China facility together with our maintenance.

[Eric Lin:]

What about next year, are we going to expect the OLED CapEx increase in a big way? And then also the total of CapEx number.

[Hee Yeon Kim:]

For next year, only we have plastic OLED expansion was decided, and the other things is not decided yet. So we don't have the numbers. But anyway, we will try to control our CapEx to be reasonable indeed in our capacity with the market situation.

[Eric Lin:]

Yes. Considering that the TV OLED will be reaching 33K this year and we're not going to expand LCD capacity in China next year, so, should we assume next year CapEx will be coming down compared with this year?

[Hee Yeon Kim:]

It's early to mention about that, so we will give you more detailed numbers at the end of this year. Please understand.

[Eric Lin:]

Certainly. My second question is regarding to OLED. What would be the number we should assume for the OLED operating loss in second quarter?

[Hee Yeon Kim:]

Operating loss should be similar trend. We try to maintain our OLED operating loss every quarter.

[Eric Lin:]

So it's guided KRW150 billion?

[Hee Yeon Kim:]

For the detailed numbers, we cannot mention about that, please understand.

[Eric Lin:]

Okay. So I will assume OLED will be still rounding below water. So when we ramp up more OLED production in second half, will that be a drag to the margin in second half?

[Hee Yeon Kim:]

Second half we have positive and negative factors simultaneously. Positive factors is the improve together with the volume scale. And negative factor is our fixed depreciation expense increase. But we hope that will be offset exactly or potentially is better.

[Eric Lin:]

Okay. Because normally in second half, we will have a higher OpEx and depreciation. Will that be still the case for this year?

[Hee Yeon Kim:]

In terms of depreciation, it should be flat every quarter.

[Eric Lin:]

Okay. What about OpEx?

[Hee Yeon Kim:]

It's quite in line with our [inaudible] trend and also R&D expansion, that will be similar or flat to increase.

[Eric Lin:]

Okay. Yes. Thanks a lot. Can I have one more question on OLED?

[Hee Yeon Kim:]

Okay.

[Eric Lin:]

Assume we have 34K capacity next year and we are -- will be able to sell our OLED TV panel at twice price of LCD, what would be the yield level that we can reach breakeven for OLED operation next year?

[Hee Yeon Kim:]

Actually it's very difficult to quantify. The cost reduction factors is not only from the yield ratio, although we have a [inaudible] ratio, we need volume scale and material cost reduction and [inaudible] production reduction. So, together with this kind of multiple process to reduce our cost [inaudible] we will deliver reasonable cost OLED to the market. But it will take time.

[Eric Lin:]

So, should we assume the ASP for OLED TV panel on a like-for-like base will be more than double compared to LCD? Will that be a reasonable assumption when we put into our model?

[Hee Yeon Kim:]

For these numbers, we cannot mention about that. Please understand, because it's -- right now volume scale is very small. But while our expense related to the R&D and marketing is reduced, so it's a bit early to mention about the kind of numbers. After reaching the 34K, fully ramped up, we can believe a more reasonable number. But anyway --

[Eric Lin:]

-- right now, the ASP premium?

[Hee Yeon Kim:]

Actually our cost structure is quite higher than LCD because of it is very early stage and also our volume scale versus density is just 1% and 100% LCD. So it's a bit unfair to compare LCD right now. So that's why we can give a more reasonable comparison between LCD and OLED after fully ramping our 34K.

[Eric Lin:]

Okay. Fair enough. And thank you so much, Hee Yeon.

[Operator:]

The following question will be presented by Andrew Abrams from SCMR. Please go ahead, sir.

[Andrew Abrams:]

Hi. Thanks. Can you give us some indication of what your planning is for the OLED TVs in terms of panel size? I guess it's primarily 55-inch thus far, and you've expressed two other models. Do you have any idea how the allocation's going to go between those three different sizes?

[Hee Yeon Kim:]

We focused 55-inch full HD last year, but this year it was changed, 55 UD and -- 65, 77 UD products. But nowadays, market response for 65 and 77 is a bit greater than our expectation, so the mix is likely to be changed toward the 65 and 77 ultra-high definition. But anyway, major production for this year should be 55 ultra-high definition product.

[Andrew Abrams:]

Got it. And is there any way you can discuss your yield? I realize that you're in the process of ramping up, which is going to affect yield no matter what the circumstances are. But is there some guidelines you can give on where you would be in terms of OLED 55-inch TVs on yield?

[Hee Yeon Kim:]

In case of 55-inch full HD OLED last year, it was already hit over 80%. Now it is a bit higher than last year. And in case of ultra-high definition, we are on the progress to increase our yield ratio to the similar level of full HD. So we believe ultra-high definition ratio should be similar at the end of this year with the full HD.

[Andrew Abrams:]

Got it. And lastly, can you talk a little bit about your utilization rate overall, not just with OLED, but how second quarter compared to first quarter and where you think maybe third quarter is going to be on -- in terms of total utilization?

[Hee Yeon Kim:]

Our total utilization was around mid-90% during first half. In second half, it was similar, maybe 90%. But total production unit will decline as I highlighted. Our TV size, which increased towards bigger screen, they should limit our production limit.

[Andrew Abrams:]

Got it. Okay. Thanks very much, I appreciate it.

[Operator:]

The next question will be presented by Rob Stone from Cowen & Co. Please go ahead, sir.

[Rob Stone:]

Hi. I had a follow-up question or a different question really on OLED market and product development. In the press release you referred to increasing the range of sizes and resolutions for OLED and also working on market support. I wonder if you could comment on whether additional models are planned for TV or whether the reference sizing resolution was about mobile OLED displays. And then the second part of my question here is, in what ways you may be working for market support, build channel support, or advertising or purchasing programs, what you might be doing by way of marketing? Thank you.

[Hee Yeon Kim:]

This year we have strong confidence about our ultra-high definition TV, especially ultra-high definition TV, after releasing ultra-high definition, so we will promote our marketing activity towards our customers and also we will do a commercial promotion in merchandising areas and public areas. We will try to highlight ultra-high definition TV into market. And detailed promotions, strategy and promotion plan, we don't have any information yet. So if you contact us after the conference call, we will prepare for that.

[Rob Stone:]

Okay. And with respect to new sizes and resolutions, was that oriented towards mobile displays?

[Hee Yeon Kim:]

We already have new resolution displays for TV, that's 65 and 77 ultra-high definition, from previous 55 full HD. For mobile side, for mobile size, full HD right now.

[Rob Stone:]

Okay. Thank you.

[Operator:]

The following question will be presented by Claire Kyung Min Kim from Daishin Securities. Please go ahead, ma'am.

[Claire Kyung Min Kim:]

Thank you for giving me a chance to ask a question again. I think for the first half of this year, the Q1 and Q2 earnings trend were quite different from the traditional patterns of lower earnings in Q1 and better earnings in Q2. This year Q1 was much better than Q2. So, can we interpret the situation as a more healthy status in terms of earnings seasonality. So if I forecast the next year's earnings, can I predict that next year's Q1 earnings are more normalized than the previous years?

[Hee Yeon Kim:]

Thanks for the good question. Actually this year we showed very mitigated seasonality. It is quite different from previous patterns. That's because of our portfolio management. As you already know, our capacity is limited from previous two years [inaudible]. So we've been limited in our capacity, we have to allocate our product portfolio based on profit maximization. So in the first quarter we are more allocating IT segment instead of loss-making tablet side, and also 32 inches which was the most profitable product in the first quarter. Right now we are more -- allocate the bigger screen TV and AIT products. So this kind of portfolio management give us the chance to mitigate our seasonality. We hope this kind of situation to be maintained the next year as well.

[Claire Kyung Min Kim:]

Thank you.

[Operator:]

There are no participants with questions. [Operator Instructions] The following question will be presented by Duncan Robertson from T.T. International. Please go ahead, sir.

[Duncan Robertson:]

Hi there. I believe that you said that you're actually considering your shareholder return policy. Please, could you share with us what sort of guidelines or framework within which you're considering that policy and what will guide your eventual decision? And when will we expect such a decision? When will we get some clarity on that? Thank you.

[Hee Yeon Kim:]

Thank you for your good question. Actually at the year 2011 we made dividend decision-making, so we start to offer dividend to investors from this year. And then next step, we are under review and under consideration among our top management, but this is not finalized yet. But anyhow, we try to support our shareholder value. So we are in talking -- in talks with several solutions. The final policy, we will get back to you on that. For now, without any finalized solution, we cannot give you any clear guidance. Sorry about that. Please understand.

[Duncan Robertson:]

Do you know when you'd be able to give more clear guidance?

[Hee Yeon Kim:]

In terms of -- anyway maybe within this year we have to set a clear guidance, we think so.

[Duncan Robertson:]

Okay, thank you. And one more question if that's okay. You mentioned that in first quarter your cost stand was very impressive, and therefore the second quarter there wasn't quite as much progress. What can we expect for the rest of the year please?

[Hee Yeon Kim:]

We try to reduce our costs at least low single-digit every quarter, is our normal target.

[Duncan Robertson:]

Okay. And I guess you talked about ASPs being down again but perhaps less so in the -- than in the second quarter due to the stabilization in some segments and the better allocation to higher ASP segments. So, presumably then the cost stand will be as strong as the price stand, is that fair?

[Hee Yeon Kim:]

In case of cost reduction, it should be a bit higher -- it should be similar or be higher than our blended ASP decrease. That's our current assumption.

[Duncan Robertson:]

Okay. Thank you very much.

[Operator:]

The following question will be presented by Ben Lu from Moon Capital Management. Please go ahead, sir.

[Ben Lu:]

Hi, Hee Yeon. Thanks for letting me ask a question. Two really quick ones, one is a follow-up on capital return. Can you remind us again in terms of Korea regulations, I think your CEO and management have bought stock back in May, so, does that prevent you guys from announcing any capital returns until end of the year? That's my first question.

[Hee Yeon Kim:]

Yes, our CEO and several top management bought our shares in this May, and so that's another solution to support our share price and to care our shareholders. And this solution is in talks with our top management, it's not finalized yet.

[Ben Lu:]

Okay. But is there any restrictions from the regulators in Korea that prevent you guys from announcing or doing anything maybe six months after management had bought stock?

[Hee Yeon Kim:]

Without any regulation issue, after the individual share buyback, if our Company would make a decision to buy our shares at the corporate level, that should be not -- that would not be favorable in terms of regulation. That's my personal opinion.

[Ben Lu:]

Got it. Okay.

[Hee Yeon Kim:]

Yeah.

[Ben Lu:]

Okay, got it. Understood. Thank you. And then my second question, Hee Yeon, is obviously you guys are focusing more on AIT. Can you remind us again what was the AIT mix within mobile in Q2? And how should we think about AIT mix in Q3 and Q4? And if you can just give us a little bit more color on AIT's price premium versus your traditional mobile as well as the margins for AIT versus your traditional mobile?

[Hee Yeon Kim:]

Our AIT portion, except our U.S. customers, our non-U.S. customers, our AIT customers, meeting in first quarter, but it was increased to mid-40 in second quarter. So we are targeting over 50 or 6% in second half, that's overall our trend and strategy. Actually there's a market benchmarking price for AIT, so we cannot tell the exact number of price premium, but anyway, it is quite good for us to support our customers' cost structure and supply chain management. That's why we are gaining market share.

[Ben Lu:]

Got it. And what did you say it was the mix in Q1?

[Hee Yeon Kim:]

Mid-teens.

[Ben Lu:]

Mid-teens, okay. And then 40% in Q2.

[Hee Yeon Kim:]

Yes. Over 40%.

[Ben Lu:]

So, 15% -- yes. So, 15% going to 45%?

[Hee Yeon Kim:]

Yes.

[Ben Lu:]

Okay. And then just -- it does have a higher ASP and margin versus your other mobile products for you guys?

[Hee Yeon Kim:]

Definitely.

[Ben Lu:]

Okay. Great. Thank you so much.

[Operator:]

The next question will be given by Chris Lane [ph] from Reader Capital [ph]. Please go ahead, sir.

[Unidentified Participant:]

Hello. Thanks for taking my question. I just wanted to check if your OLED television production goal is still 600,000 for this year and 1.5 million for next year?

[Hee Yeon Kim:]

Yes, that's our target number.

[Unidentified Participant:]

Okay. Thank you very much.

[Hee Yeon Kim:]

However, if our customers' response for bigger screens such as 65 and 75, it is to be adjusted below. But that's great impact for us.

[Unidentified Participant:]

Thank you.

[Operator:]

Currently there are no participants with questions. [Operator Instructions]

[Hee Yeon Kim:]

Operator, if there's no questions, we would like to end the call now. Yeah. On behalf of LG Display, we thank you for participating in our conference call. Should you have further questions, contact either myself or my colleagues. Thank you.