...February 21, 2022 TOKYO (S&P Global Ratings) Feb. 21, 2022--Our ratings on Sharp may face pressure if the company reconsolidates an LCD panel manufacturer as planned. On Feb. 18, 2022, Sharp Corp. (##-/Stable/B) announced that it will start discussions for acquiring shares in and reconsolidating as a wholly owned subsidiary Sakai Display Products Corp. SDP, a large-size liquid-crystal display (LCD) manufacturer, is an equity-method affiliate: Sharp owns 20% of SDP's shares. Reconsolidation of SDP would very likely worsen Sharp's profitability, in our view. The company has been posting about Ñ5 billion in investment losses annually on average since fiscal 2017 (ended March 31, 2018), when the company joined Hon Hai Group. We estimate that most of the investment loss is generated from the loss at SDP. SDP's LCD panels are mainly used for big screen TVs. We consider that in the big screen TV market, a shift from matured LCD panels toward organic light-emitting diode (OLED) panels will accelerate....
