15-r007TU-Display does not turn on when it automatically turns off after closing lid.

I just purchased hp 15-r007TU, Windows 8.1 x84. I'm facing a strange problem. After all initial setup, I put the laptop on to download and install all lates Windows 8.1 patches. The display is set to tuen off automaticaaly after 5 minutes. After 5 min it did turn off as set. But then I can not turn it back on. I pressed all (except power) keys, used touch pad, closed lid and opened but it stayed off. Laptop was on and running as I could see HDD lights flickering, I could hear system sounds on pressign mute/volume keys, also I could toggle WiFi with key. I then pressed power off key to turn Windows off normally. I did turn off. I again turned it on, I could see 'hp' logo with spinning wheel and then nothing. Display is off and I don't see start screen. I have to hard reset (press power button for more than 5 seconds) then display is normal. This happens every time the display turns itself off automatically after set time or I close the lid. Only after hard reset it works normally and I see the start menu.
The power settings I use are:
1. never put system to standby after preset time. (either on battery or AC power)
2. turn display off after 5 min. (both on battery or AC power)
3. when I close lid - do nothing. (both on battery or AC power)
4. when I press power button - shut down
I am using Windows 8.1 x64 with all latest patches installed. BIOS updated to lates available. All latest drivers installed.
I have not yet set password to the system to log in.
Help would be immensly appreciate. The device is still in warrenty if it needs to be replaced.

Hello K1200LT,
Welcome to the HP Forums!
I understand the computer will not sleep when you shut down the lid. You seem to have already done most of the troubleshooting I would've suggested.
To be honest,  it is either a hardware or software-related issue. To determine this, I would like you to reinstall the operating system. It will clear up any software conflicts and allow you to start fresh.
First, please ensure you backup your files. Here is information on how to do this: Backing Up Your Files (Windows 8)
Once this is done, it is safe to reinstall the operating system. Performing an HP System Recovery (Windows 8)
If the same situation occurs, the computer likely has faulty hardware. At that point, please contact HP phone support. You can utilize this website to learn how to contact HP appropriately, based on your region: Contact HP Worldwide
Please let me know what happens. Thanks!
Mario
I worked on behalf of HP.

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