This article examines why Japan Display’s share price is so low, focusing on four reasons: the decline of LCDs as the market shifts to OLED, price competition from Chinese companies, prolonged losses and negative net worth, and share dilution from capital raisings. It also briefly explains the background to the sharp rise and fall in March and the company’s prospects.
The main reasons Japan Display’s share price has remained depressed are structural changes in the market, with its core LCD business shifting toward OLED, and intensifying low-price competition from Chinese manufacturers. As the smartphone market moves toward OLED, demand for LCDs is shrinking, and the company’s performance has deteriorated over an extended period. In addition, continued losses and negative net worth are weighing on its financial position. These factors have kept the share price low, making a recovery in financial strength and a return to profitability the key focus.
The sharp swings in the share price have also been affected by share dilution from repeated capital raisings. The company’s past third-party allotment capital raisings reduced the value per share and heightened investors’ perception of risk. The possibility of further capital strengthening remains, and the recovery of its financial base is a factor that will influence the share price’s direction. In addition, the rise of Chinese manufacturers and the cost structure of its domestic factories remain barriers to competitiveness.