LPL, LG Display Co., Ltd.

Will it survive?

• Can it pay its interest? 1.2×
  Thin
  Operating income ₩2.23T ÷ interest expense ₩1.82T
  What this means

  Operating profit covers interest, but with little room. A bad year, a refinancing at higher rates, or a revenue wobble closes the gap fast.

• How heavy is the debt, net of cash? ₩6.15T · 2.8× operating profit
  Meaningful net debt
  Cash ₩2.02T + ST investments ₩328.6B − debt ₩8.50T
  What this means

  Netting ₩2.35T of cash and short-term investments against ₩8.50T of debt leaves ₩6.15T owed, about 2.8× a year's operating profit (3.8× on the gross debt, before the cash). Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.

• How long is cash tied up? —
  Not enough data
  What this means

  The filing data didn't include the inputs for this check.

Is it a good business?

• Return on invested capital -9%
  Below average through the cycle
  3-yr median, range -10%–-3%; the latest year is left out — large non-operating charges put its operating line well above pretax profit
  Industry peers: median 18%
  What this means

  The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; a return below the cost of capital (~8%) erodes value as a business grows rather than building it — the test Buffett weighs most. The headline is the median of the last 3 years, so one peak or trough year doesn't set the verdict. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.

• Owner-earnings margin 1%
  Positive this year, negative across the cycle
  latest ₩282.0B = operating cash ₩2.41T − maintenance capex ₩2.13T (positive this year), after an earlier loss stretch (10-yr median -1%)
  Industry peers: median 14%
  What this means

  What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's 1% of revenue this year, a -1% median across 10 years.

• Are earnings backed by cash? ₩2.41T
  Loss, but cash-generative
  Net income (₩2.56T) · cash from operations ₩2.41T
  What this means

  The company reported a net loss, so a conversion ratio isn't meaningful. What matters then is whether operations still threw off cash, here, they did.

How is the cash used?

• Where do the earnings go? 82%
  Returns about half
  Dividends + buybacks ₩232.6B ÷ Owner Earnings ₩282.0B
  What this means

  Of ₩282.0B Owner Earnings, ₩232.6B (82%) went back to shareholders, ₩232.6B dividends, ₩0 buybacks. Returning most of it is the mark of a mature business with little left to reinvest at a high return; reinvesting most could mean a long runway, or empire-building. The split doesn't say which; the return earned on it (see ROIC) does.

• Investing or harvesting? 0.42×
  Harvesting
  Capex ₩2.13T ÷ depreciation ₩5.13T
  What this means

  Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.

Graham’s defensive tests · 0 of 5 met

Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.

• Adequate size —
  Revenue ≥ $2B (a dollar floor) · ₩26.62T
  What this means

  Big enough to weather a storm. Graham's floor is a dollar figure — about $2B of revenue as a conservative modern stand-in. This company reports in its home currency and we carry no exchange rate, so we show the figure and leave the size bar for you to apply rather than convert it with a number we don't have.

• Strong liquidity Miss
  Current ratio ≥ 2× · 0.64×
  What this means

  Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.

• Conservative debt Miss
  Debt ≤ working capital · ₩8.50T vs (₩5.74T) WC
  What this means

  Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.

• Earnings stability Miss
  A profit every year (10-yr record) · 6 loss years
  What this means

  Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.

• Dividend record Miss
  Uninterrupted dividends · 5 of 10 yrs
  What this means

  An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.

• Earnings growth Miss
  Earnings +33% over the record · −328%
  What this means

  At least a third more earnings than a decade ago, averaging three years at each end. Net income (not per-share), so stock splits don't distort it, buybacks and dilution show up in the share-count line instead.

• Moderate price —
  P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price
  What this means

  Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are ₩-5578.61/share (latest year ₩-5125.21), the averaged base the calculator's gate runs on, and book value is ₩13084.52/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.

Durability & moat, 2015–2024

Whether the record’s returns held, and what the capital reinvested earned.

• Profitable years 4 of 10
  What this means

  Lost money in 6 year(s), look at what happened there before trusting the average.

• Return on capital ≥ 15% 2 of 8 yrs
  What this means

  A moat shows up as a high return on invested capital that holds year after year, not one good vintage.

• Operating margin 7% → −7% (3-yr avg ends)

  In the filing’s words The filing claims pricing power in its strongest form — price raised, volume held — yet the margin here has not widened to match. The claim leads the record; weigh them together.

  What this means

  Through the cycle the operating margin slipped — about 7% early to −7% lately, median −0% — competition or costs are biting in.

• Reinvestment, incremental ROIC −47%
  What this means

  Reinvested capital came back at a negative incremental return over this window — the invested base grew while operating profit did not. The filings show where it went.

• Worst year 2019 · −12.2% op. margin
  What this means

  Operations went underwater in 2019, understand why before trusting the good years.

• Share count +3.1%/yr
  What this means

  The share count is rising, dilution works against you on a per-share basis.

• Dividend record rising
  What this means

  Paid and raised the dividend across the record, the continuity Graham prized.

• How management talks about it Promotional
  What this means

  The returns have faded, yet the filing reaches for a promoter’s vocabulary — world-class, best-in-class, disruptive — more than an owner’s. When the words sell harder than the results deliver, the gap is the thing to weigh.