Securities companies: large size panel opens the price rise cycle and the industrys profitability improves

category:Finance
 Securities companies: large size panel opens the price rise cycle and the industrys profitability improves


Leading production capacity of large panel

In 2019, the supply and demand of LCD panel industry accelerated to deteriorate, and the main panel manufacturers in South Korea suffered huge losses for several consecutive quarters, and are gradually withdrawing LCD production capacity. Since last year, domestic panel companies have been facing a cold winter of falling prices. As Korean manufacturers will further withdraw from LCD production capacity in 2020, the supply and demand balance of the whole large-scale display market is developing in a good direction. Domestic companies represented by BOE and TCL Group (Huaxing photoelectric) are rising in an all-round way.

At present, in the global panel industry, China and South Korea have different directions. In the past few years, panel manufacturers such as BOE and TCL have made great efforts in LCD production capacity, which has increased rapidly. However, Korean manufacturers have gradually withdrawn LCD and turned to full development of OLED production capacity.

Founder Securities pointed out that the LCD panel industry in mainland China began to scale industrialization in 2005. After 10 years, it has gradually acquired the ability of counter cycle investment for the first time. Since 2009, the mainland enterprises led by BOE, represented by TCL Group (Huaxing Optoelectronics), Shenzhen Tianma and CLP panda, have started the construction and rapid expansion of the high generation line, combined with the mature supporting of the downstream industry chain, the market share of LCD products in the world has been accelerating, gradually reducing the share space of the original enterprises in Taiwan and South Korea.

According to statistics released by IHS, in 2018, China has surpassed South Korea as the largest source of LCD display panel capacity. It is estimated that more than 40% of global capacity will come from China in the future, and more than 50% of LCD capacity will come from China in the future.

Enter price rising cycle

The latest data confirms the strength of Chinese mainland Panel Companies in LCD TV panel.

According to the report released by Qunzhi consulting on February 5, the global LCD TV panel shipment volume in 2019 was 283 million pieces, down 0.2% year on year, and the shipment area was 160 million square meters, up 6.3% year on year. From the perspective of global LCD TV panel shipment ranking in 2019, BOEs shipment area surpassed that of Korean manufacturer LGD for the first time, ranking first in both the number and area of shipments, and other Chinese manufacturers moved forward with the expansion of production capacity.

For mainland Chinese manufacturers, the report shows that BOEs worlds first g10.5 generation line continues to climb and reach full production. In 2019, the LCD TV panel production capacity increased by more than 20% year-on-year. In 2019, the total shipment reached 53.3 million pieces, down 1.8% year on year. However, the adjustment of production capacity structure led to the optimization of size structure. The 65 inch and 75 inch shipments ranked first in the world, with a shipment area of 29.12 million square meters, up 24.6% year on year, ranking higher than LGD.

In 2020, with the mass production of Wuhan g10.5, BOE will continue to expand its advantages in large-scale products, improve customer structure, actively reduce production capacity and ensure profitability.

The current outbreak of the epidemic has caused a certain impact on the panel production capacity, and many panel production lines have been established in Wuhan. Guosheng Securities pointed out that Wuhan is one of the most important panel towns in China. BOE, Huaxing optoelectronics and Shenzhen Tianma have panel factories in Wuhan. In terms of stock, Wuhan Tianma 4.5 generation line is for professional display, while Wuhan Tianma 6 generation line and Huaxing photoelectric T3 production line are mainly for smart phones. In terms of increment, BOE B17 production line is for TV, and Huaxing photoelectric T4 production line is for smart phones. Huajin Securities pointed out that the panel industry, including BOE, Shenzhen Tianma and TCL Huaxing, has some production lines in Wuhan. Due to the particularity of the industry, production has not stopped during the Spring Festival. In the long term, the overall driving logic of the industry remains unchanged, and there may be fluctuations in the short term. Tianfeng Securities believes that in January 2020, the large-scale LCD panel will start the price rise cycle, and the profitability of the whole industry is expected to continue to improve. According to the latest group intelligence price express, it is estimated that the price of 32-65 inch panel will be increased by another $1-2 in February. The direct impact of the epidemic on production capacity is limited, and the short-term indirect impact on the supply side is greater than that on the demand side. It helps the industry out of stock price rise trend, and maintains the industry price rise cycle judgment. The panel industry is expected to have a profit turning point in the first quarter of this year. Source: responsible editor of Securities Times: Yang bin_nf4368

The current outbreak of the epidemic has caused a certain impact on the panel production capacity, and many panel production lines have been established in Wuhan. Guosheng Securities pointed out that Wuhan is one of the most important panel towns in China. BOE, Huaxing optoelectronics and Shenzhen Tianma have panel factories in Wuhan. In terms of stock, Wuhan Tianma 4.5 generation line is for professional display, while Wuhan Tianma 6 generation line and Huaxing photoelectric T3 production line are mainly for smart phones. In terms of increment, BOE B17 production line is for TV, and Huaxing photoelectric T4 production line is for smart phones.

Tianfeng Securities believes that in January 2020, the large-scale LCD panel will start the price rise cycle, and the profitability of the whole industry is expected to continue to improve. According to the latest group intelligence price express, it is estimated that the price of 32-65 inch panel will be increased by another $1-2 in February. The direct impact of the epidemic on production capacity is limited, and the short-term indirect impact on the supply side is greater than that on the demand side. It helps the industry out of stock price rise trend, and maintains the industry price rise cycle judgment. The panel industry is expected to have a profit turning point in the first quarter of this year.