Supply chain pressure test, LCD panel out of stock when to ease? "Panels are indeed in an out-of-stock cycle, which is not expected to ease in the first quarter of 2021. If there is no major change on the demand side in the second half of 2021, it is believed that the shortage of supply is expected to improve." TCL China star an insider discloses to the reporter.

 

 

 

According to the reporter of many LCD industry chain upstream and downstream manufacturers interview investigation learned that the current LCD panel facing down the terminal link of the strong stock demand, a TV manufacturer inventory is only 4.3 weeks, far lower than the 5 weeks of safety inventory, facing up to drive IC, glass, polarizing pieces and other raw materials supply gap. The upstream and downstream demand conduction drives the structural adjustment of LCD panel production capacity, and to a certain extent highlights the urgency of China's LCD supply chain to get rid of the "low-end matching".

 

 

 

Upstream material supply is tight to different degrees

 

 

 

"The whole panel industry and upstream are facing rising costs. Now the supply of components is tight, or the semiconductor is the most tense, including IC, POWER, etc., from Wafer to sealed test is also tight, in addition to glass, polarizer also has a little tension. Youda photoelectric general manager Ke Furen said publicly recently.

 

 

 

BOE in the investment interactive platform also said that affected by tight raw materials, LCD panel supply and demand is expected to continue to maintain tight in the first quarter of 2021.

 

 

 

According to the reporter who learned from the industry chain, the upstream supply of liquid crystal display panels is currently facing a shortage of components such as driving IC, glass, polarizer, and even began to affect the first-tier panel manufacturers from the end of 2020, and will be more serious in the first quarter of 2021.

 

 

 

The shortage of glass was mainly affected by a temporary power outage at a glass substrate plant of NEG in Japan in December 2020. NEG is the world's third largest supplier of LCD glass substrates, with a global market share of 19%(including joint venture plants), behind Corning and Asahi Glass. It is understood that NEG in the large size LCD generation line (>G7) the main customer base has LGD, BOE, AU Optoelectronics, China Electric Panda and Huike. According to the research of Group Intelligence, the impact of NEG blackout event on capacity supply in the first quarter of 2021 is 2.5%, which is equivalent to 95K capacity loss of G8.5 generation.

 

 

 

The impact of the above power outage on downstream customers varies, but the domestic polarizer is generally in short supply. "By 2020, there will be nearly 20 production lines above the G8 in China already or under construction. After all these lines are completed, the demand for LCD polarizers will be 370 million square meters, of which 150 million square meters will be added after 2018.

 

 

 

While overseas production capacity is 608 million square meters, the domestic production capacity has been put into production is 286 million square meters, is still unable to meet the domestic LCD demand." Shenzhen SanLiSpectrum Photoelectric Technology Co., Ltd. Deputy General Manager Ruan Zhiyi said.

 

 

 

"Tight supply conditions are expected to persist for the next two years," he said, driven by the release of demand for polarizers from high-generation lines and the growth in the area of large-size TV products over 65 inches. With the mass production of new ultra-wide capacity, the supply tight situation is expected to ease in two to three years. But it is still estimated in the medium to long term that about 30% of the polarizers will need to be imported from outside mainland China." A domestic polarizing enterprise responsible person told reporters.

 

 

 

"If the upstream material shortage degree of sequencing, the first or drive IC, the importance is also the largest." TCL China star insider said in an interview with a reporter. Large-size drive ICs have been in short supply since the second half of 2020 due to tight production capacity on 8-inch and 12-inch wafers. From the perspective of supply, since the IC price rise in the second half of 2020, driving IC product profit margin began to slowly recover, so the shortage situation will not be further serious. Although it is expected that the shortage situation will not be greatly alleviated in 2021, the impact is controllable for first-line panel factories, and the pressure is relatively large for other small panel factories.

 

 

 

There are structural effects at both ends of supply and demand

 

 

 

On the one hand, LCD panel production has encountered the shortage of upstream raw materials resulting in tight supply, but on the other hand, the exuberant demand also intensified the imbalance between supply and demand. "The recent shortage of upstream panel materials has been highlighted, which is expected to impact global LCD TV panel shipments by more than 10% in the first quarter of 2021. The global LCD TV panel supply and demand ratio is expected to be 3.1% in the first quarter, maintaining the tight supply situation." Group wisdom consulting (Sigmaintell)TV division research director Zhang Hong told reporters.

 

 

 

 

 

 

 

In the first quarter of 2021, the inventory demand of the top ten TV brands in the world has increased from the fourth quarter, with a growth rate of about 2%. Firstly, the inventory of the top ten global brands will remain low at the end of 2020. Secondly, in the first quarter of 2021, the real market demand will drive and replenish the inventory. Finally, due to the residential economy effect derived from the epidemic, the demand for IT products in office, learning and entertainment scenes continues to rise, and the three application markets of notebook, display and tablet have more than double digit growth. Topology Research, a division of TrendForce, has forecast total desktop monitor and laptop unit shipments of 152 million and 217 million units in 2021, with annual growth of 1.3 percent and 8.1 percent, respectively, making the overall trend positive.

 

 

 

Strong IT demand has driven the adjustment of the panel factory's capacity strategy. Samsung Display, LGD continue to delay shutdown of LCD production. TrendForce, according to research thinks, the move to the first quarter of 2021 panel does not have a significant effect of supply and demand, the cause is samsung display was planning the first quarter of next year to supply nearly 1.8 million pieces of 1.1 million pieces of TV panel and display panel to group brands, and are facing shortage of related components and shipments are expected to reduce to 1.5 million and 550000, to April to make up the gap.

 

 

 

The more important strategy shift is the structural adjustment of panel products. From 2020, different from the previous insist on using large size to digest production capacity, in the state of demand fluctuation and continuous increase of production capacity, panel manufacturers are very determined to make adjustments: not only to use large size to solve the problem of profitability and digestion of production capacity, but to de-TV, reduce the allocation of TV production capacity. Li Yaqin, general manager of Sigmaintell, said in an interview with reporters that the 10.5 generation line and 8.6 generation line have found a balance in IT and TV and other fields, and diversification and decentralization are the invariable strategy. The share of LCD TV capacity is expected to fall to 70% by 2021, with IT and mobile phones accounting for nearly 30% of the remaining.

 

 

 

Topology Research saw panel makers collectively planning for laptop panel shipments of up to 257 million units, compared with more than half of the industry's forecast of 20 million units. Therefore, we also need to consider the overall demand and supply shortage of semiconductor materials such as driving ICs. Some manufacturers' plans may be too aggressive, but the overall supply and demand is within a controllable range.

 

 

 

Get rid of "low-end supporting equipment" to ensure supply chain security

 

 

 

Although at the moment, LCD panels are facing a supply and demand imbalance between upstream and downstream, but looking at the whole year, research institutions gave a cautiously optimistic judgment.

 

 

 

Li Yaqin said that in 2020, the global shipment volume of LCD TV panels in 265 million, down 6.4% year on year. In 2021, the supply and demand ratio of LCD TV panel market is 5.3%, which is still relatively balanced according to the model. Points in time to see in the first half of the global LCD TV panel basically state of tight balance between supply and demand, supply and demand situation in the second half of the points two possibilities view: one is the vaccine work, the world's major developed economies, social isolation, occupy the scene gradually receded, the demand dropped gradually, in the second half of the supply and demand relations towards easing, panel prices may appear callback space; The second possibility is a pessimistic scenario in which demand will continue to fluctuate at relatively high levels and the tight balance between supply and demand will persist.

 

 

 

In order to maintain a stable supply and demand and promote the long-term healthy development of China's LCD industry, it is crucial to maintain an orderly supply chain. From the influence of the Japanese NEG blackout on the downstream to different degrees, the localization of key materials in the upstream of the panel in China should make up the "short board" to promote the safety of the supply chain.

 

 

 

Zhang Hong believes that in the upstream of the key material localization supporting panel, although the localization level of some materials is high, but there is still an obvious imbalance, especially the high generation production line of glass and semiconductor materials matching rate is low, need to make up for the "short board".

 

 

 

The development of the panel industry has promoted the development of China's display IC industry, but "the current display IC localization rate is less than 5%, high external dependence. At present, the main display IC packaging and manufacturing suppliers are concentrated in South Korea and Taiwan, which increases the difficulty of the development of the whole display chip supply chain. In order to achieve localization, it is necessary to break through the domestic display chip industry chain and realize the localization development goal of "design as the leader, manufacturing as the foundation, equipment and material as the support". "Said Zhang Jinfang, chairman of Beijing Jichuang North Technology Co.

 

 

 

From the overall view of display materials, "China's mask, wet chemicals, electronic gas, target material development has a certain scale, but glass, polarizer, photoresist need to be further strengthened." Lu Jin of standing deputy secretary general of association of Chinese electronic material industry emphasizes.

 

 

 

The substrate glass accounts for more than 20% of the raw material cost of the panel, and the technical difficulties, process challenges and lack of materials become the development difficulties. Happily, DongXu Group G6(compatible with G5.5)LTPS substrate glass has achieved good product off the production line and quickly got the first order. In November 2020, Rainbow Glass officially mass-produced the overflow method G8.5+ substrate glass with independent intellectual property rights, breaking the foreign monopoly and filling the domestic gap. Lu Jin said that the future will need to further increase the investment in new product technology research and development, accelerate the pace and speed of transformation and upgrading.

 

 

 

The localized supply gap of polarizer continues to exist. With the mass production of new ultra-wide capacity, the supply shortage is expected to ease in 2 to 3 years. A domestic polarized film enterprise responsible person told reporters that the enterprise itself needs to actively through the bottleneck and production line transformation and upgrading, in order to ensure the stability of quality under the premise of improving the production line speed, so as to enhance capacity.

 

 

 

Photoresist is a high technical barrier material, highly dependent on imports at present, shelf life is short, non-local supply of supply stability and validity risks. The domestic photoresist market demand for TFT-LCD is expected to reach 22,000 tons in 2021. It is urgent to solve the problem of raw materials, production technology and engineering, product quality control technology.

 

 

 

The localization rate of electronic gas for flat panel display reached 60%. Molybdenum target material for flat panel display has achieved 100% local coverage of users. Molybdenum target material has the most perfect industrial chain and the most obvious industrial advantage scale at present. Due to the development of 8K HD and large size panel, the promotion of copper process may lead to the reduction of the demand for molybdenum target. Domestic electronic enterprises generally lack of R&D investment, supporting facilities are highly dependent on imports. The domestic demand for TFT-LCD electronic gas is expected to reach 1.42 billion yuan in 2021.

 

 

 

To strengthen the stability of China's LCD supply chain, industry, government and other aspects need to promote. Zhang Hong suggested that, first of all, the government should increase the policy guidance and support for upstream material localization; In addition, upstream supporting enterprises should strengthen and improve their operational capabilities, especially enhance product research and development capabilities and the training of local technical personnel, so as to get rid of "low-end supporting" by constantly breaking through technical barriers.

 

 

 

Related historical news

 

 

 

Panel industry chain companies soared, LCD module maker Zhongshen Optoelectronics plans to list A-shares

 

 

 

Panel price rise prompted the outbreak of positive performance which companies? Since the middle of 2020, the price of panels has continued to rise, with the largest and fastest increase in the past decade. Industry insiders believe that the first quarter of this year or a continuation of the rise in the panel.

 

 

 

Hanbo high-tech and TCL technology rose yesterday are benefiting from panel prices.

 

 

 

Hanbo High-tech, a panel industry chain company listed on the New Third Board, surged yesterday, up 12.49% to 48.36 yuan, the biggest one-day gain since the listing of the company's selected floor. On the evening of the 12th, Hanbo High-tech disclosed the first performance forecast of the selected layer, the company's performance in 2020 is expected to increase by 31% compared with the same period last year.

 

 

 

Panel supplier TCL Technology also bucked the trend yesterday, briefly approaching its daily limit before closing up 7.44 per cent. Shares of TCL Technology (TCL) have risen 16.88% in less than three trading days since the company disclosed a 60 percent year-on-year increase in its 2020 earnings on Monday evening.

 

 

 

Hanbo High-tech is a comprehensive solution provider of backlight display module and related components such as polarizer, light guide plate and backplate, which integrates light guide plate design, precision mold design, overall structure design and intelligent product manufacturing. Its biggest customer is BOE, the world's largest maker of LCD panels.

 

Hanbo High-tech analysis of the reasons for the growth in 2020, said that the development of new customers has achieved results, year-on-year growth in revenue; The optimization of product structure and the upgrading of machine types drive the increase of comprehensive gross margin and the increase of profit.

 

TCL technology is disclosed, which is expected in 2020 profit of 4.2 billion yuan to 4.46 billion yuan, an increase of 60% to 70%, the main influence factors including its TCL huaxing keep full pin full production, continuously optimize the product structure, operating efficiency to keep the industry leading, full-year operating income rose by more than 35%, net profit rose more than 140%, the large size business net profit year-on-year growth over six times; The company's industrial finance and investment business plate maintained steady growth, good investment income, etc.

 

 

 

TCL Huaxing, also known as Huaxing Optoelectronics, is a well-known LCD panel manufacturer in China, ranking closely behind BOE. Huaxing photoelectric panel business covers mobile phones, color TV and other terminal areas.

 

 

 

Hanbo Hi-Tech and TCL Technology coincide with the growth of performance attributed to the industry growth. In fact, since the middle of 2020, the price of panels has continued to rise, with the largest and fastest increase in the past decade, among which the price of small and medium sizes has increased most obviously, with the price of 32 inches doubling and the price of 43 inches increasing by 75%. Of the larger panels, the biggest jump was at 55 inches.

 

 

 

LCD Panel Prices by Size 2020, Source: Discien

 

 

 

Show (DISCIEN) advisory panel industry research institute di Cui Jilong, general manager of the Shanghai newspaper interview, said the global outbreak has spawned curtilage economy and home office market, the market is mainly the corresponding display products such as televisions and monitors, notebook, plus large U.S. government subsidy, eventually make the world's second largest market in North America market demand. At the same time, from the supply side, it shows that the industry has experienced a major downward cycle of nearly three years. Under the pressure of the rise of Chinese manufacturers, South Korean manufacturers gradually quit their production capacity. In addition, the epidemic slowed down the climb of new production capacity, and under the pressure of supply and demand, the price finally exploded.

 

 

 

Display panel price rise benefits, in the fourth quarter of 2020 burst. The company is expected to make a profit of 60 million yuan in the fourth quarter of 2020, a quarter-on-quarter growth of nearly double. And TCL technology is expected to return to the mother's net profit of 2.175 billion yuan - 2.435 billion yuan in the fourth quarter of 2020, the profit of a single quarter is more than the sum of the net profit of the first three quarters.

 

 

 

For 2021, Cui JiLong said that in 2021, BOE BOE, Huaxing photoelectric panel factory and other new factories accelerated climb, at the same time after the return of the profitability of the panel, Samsung display, LGD and other South Korean manufacturers also delayed the pace of the withdrawal of production capacity, supply increased effectively; On the demand side, it is doubtful whether the North American market will continue to grow in 2021; In addition, as the world's largest market, China's TV market size continues to shrink. Generally speaking, panel prices are expected to enter a downward cycle in the second quarter of this year.

 

 

 

Forecast prices for LCD panels of various sizes in 2021. Source: Discien

 

 

 

Insight, another professional research institute, also expects LCD TV panel prices to maintain an upward trend in the first quarter of 2021, and is expected to level off in the second quarter.

 

 

 

LCD module manufacturer Zhongshen Optoelectronics has started listing guidance for its planned A-share listing

 

 

 

Shenzhen regulatory bureau disclosed dongguan securities about Shenzhen zhongshen optoelectronics co., LTD. (hereinafter referred to as "zhongshen optoelectronics") initial public offering and listing guidance for filing information.

 

 

 

It is disclosed that Zhongshen Optoelectronics intends to make an initial public offering of shares and list on the domestic stock exchange. It has accepted the guidance of Dongguan Securities, and on January 4, 2021, it has carried on the guidance and filing in Shenzhen Securities Regulatory Bureau.

 

 

 

According to its official website, Zhongshen Optoelectronics is a state-level high-tech enterprise, specializing in the R&D, production, sales and technical services of LCD and LCM. The company's products cover CSN, TFT and other LCD panels and COB, TAB, COG and other LCM module products; Mainly targeted at the small and medium size display market below 15.6 inches, its LCD and module products are mainly used in mobile terminals, vehicle-mounted display, entertainment display, industrial instruments, etc.

 

 

 

In terms of ownership structure, according to the Skyeye investigation, Xu Junhong directly holds 47.73% of the shares of Zhongshen Optoelectronics, and indirectly holds 3.39% of the shares of the company through Shenzhen Hongxin Investment Partnership (Limited Partnership), holding a total of 51.12% of the shares of Zhongshen Optoelectronics, and is the largest shareholder and actual controller of the company. In addition, the shareholders holding more than 5% are Shenzhen Guogang Capital Investment Management Co., Ltd., Xu Junwei and Lin Changchun, holding 14.32%, 11.93% and 8.11% respectively.

 

 

 

OLED plate once again pull up large - size panel prices rise without stop

 

 

 

On January 14, the OLED plate again pulled up, with Versino up by the daily limit, BOE A and Shenzhen Tianma A up nearly 6%, and Rainbow Shares and TCL Technology followed.

 

 

 

According to the forecast data of Sigmaintell, LCD TV panel prices continued to rise in December and are expected to maintain a large increase in January. 32 "43" / / "/ 50 to 55" / 65 "/ 75" panel will keep prices $3.0/3.0/5.0/5.0/5.0/5.0. Industry insiders said the tight 8-inch foundation-manufacturing capacity situation is likely to continue into the third quarter of 2021, and the price rise trend for larger panels will continue.

 

 

 

China Post Securities said that in the short term, the industry supply and demand shortage pattern is difficult to improve quickly, the probability of continued price increases. Annual report window, leading or will usher in Davis double - click market. In the medium and long term, heavy assets constitute the moat of leading enterprises, and the industry periodicity is weakened, leading enterprises are expected to obtain more stable cash flow and profit elasticity is highlighted.

 

 

 

The OLED sector pulled up again, with Verxino (002387) up by the daily limit, Rainrainbow shares (600707) up by more than 5%, Nandai Optronics (300346) up by more than 4%, Jizhi Technology (300566), Feikai Materials (300398) up by more than 3%, Zhiyun shares (300097), Wanshun New Materials (300057), Xingxing Technology (300256) and other stocks also had a bright performance. In the above stocks, some investors are more concerned about the revenue of Vigino. It is reported that Visino in the first half of 2020 to achieve operating revenue of 1,165,046,678.23 yuan, more than 4% year-on-year growth; Net profit attributable to shareholders of the listed company was 92,491,254.89 yuan, a year-on-year decrease of more than 47%; The total assets of the company at the end of the reporting period were RMB 38,052,521,770.69, an increase of 2.43% compared with the end of the previous year.

 

 

 

BOE raised 20 billion to acquire Wuhan BOE part of the equity, Chongqing BOE shows the capital increase

 

 

 

BOE cast 20 billion fundraising plan to increase efforts to seize the panel market. Display panel leader BOE A (000725.SZ) again released A huge fixed increase fundraising plan. On January 15, the company announced that it planned to raise no more than 20 billion yuan for the acquisition of part of Wuhan BOE Optoelectronics, Chongqing BOE Display capital increase and other projects.

 

 

 

Prior to this, BOE A has completed five times of private placement fundraising, with A total amount of over 70.8 billion yuan, mostly for the production of thin-film transistor liquid crystal display devices (TFT-LCD) projects. Among them, BOE A completed A 45.7 billion yuan refinancing in 2014 is A record.

 

 

 

Add 10.5 generation LCD line to seize the OLED market

 

 

 

After years of development, the global display panel has bred a huge market with a scale of 100 billion dollars. Semiconductor display, including TFT-LCD and AMOLED, has become the mainstream technology of display panel.

 

 

 

The private placement plan shows that BOE A will acquire 24.06% of Wuhan BOE Optoelectronics for 6.5 billion yuan, significantly increasing its stake in the latter. At present, BOE A holds 23.08% of Wuhan BOE Optoelectronics. BOE A has the control of Wuhan BOE Optoelectronics because it has signed A concerted action agreement with Wuhan Airport Industrial Development Investment Group.

 

 

 

It is reported that Wuhan BOE Optoelectronics's main business is the R&D, production and sales of thin-film transistor LCD devices and related products and supporting products, mainly producing large-size display products of 32 inches and above; The company's revenue mainly comes from the 10.5 generation TFT-LCD production line, with the designed production capacity of glass substrate 120,000 pieces/month, and the mass production will be realized by the end of December 2019. According to market research institutions, TFT-LCD will still maintain 94.10% of the shipments and 64.25% of the revenue share in 2022. TFT-LCD technology will still occupy the main market space of semiconductor display industry for quite a long time.

 

 

 

Semiconductor display industry is A cyclical industry. In 2019, the supply of panel industry exceeds demand, and the product price drops, BOE A's profit level declines to A certain extent. However, with the large-scale withdrawal of overseas production capacity and the increase in the demand for large-size panels, the price of panel products has gradually risen, and the industry has begun to show a recovery trend. BOE A recently revealed that Wuhan 10.5 generation production line is climbing according to plan, but has not yet reached full production, which is expected to reach full production in the first half of 2021. BOE A believes that the company through the non-public offering to increase the shareholding ratio of Wuhan BOE Optoelectronics will further enhance the control of the production line, while enjoying more follow-up industry development dividends.

 

 

 

Another major purpose of the private placement is to expand capacity to grab the OLED market. BOE A plans to invest 6 billion yuan in Chongqing BOE Display and build the 6th generation AMOLED (flexible) production line project of BOE Chongqing, and 1 billion yuan in Yunnan Chuangshie Optoelectronics and build the 12-inch silicon-based OLED project.

 

 

 

In recent years, Apple iPhone, Samsung Galaxy, Huawei Mate and other new mobile phones have adopted AMOLED display screens. AMOLED display technology is increasingly widely used in the market of small and medium-sized smart mobile display terminals, and the AMOLED product market is developing rapidly. The research and development period of AMOLED technology is longer than that of TFT-LCD technology, and the difficulty of improving yield and reducing cost is much greater than that of TFT-LCD technology. However, AMOLED industry strategy is of great significance, as one of the strategic emerging industries to get policy support.

 

 

 

BOE A believes that the company will further enhance the diversification of production technologies through the capital increase in Chongqing BOE Display and the construction of BOE Chongqing 6th generation AMOLED (flexible) production line project, which will use A variety of high-resolution OLED technologies, which will be beneficial to the deepening of the company's technology reserves. By investing in the 12-inch silicon-based OLED project of Yunnan Chuanyuji Optoelectronics, the company can achieve an average annual production capacity of 5.23 million OLED micro-displays. On the one hand, under the guidance of the national continuous industrial policy, the company can capture the market by expanding production capacity and form brand effect. On the other hand, it can increase investment, make breakthroughs in key technological links, speed up catching up with international advanced technologies, and break the monopoly of international giants.

 

 

 

In addition, the capital raised by BOE A will also be used for the capital increase and construction of Chengdu BOE Hospital project, repayment of the loan from Fuzhou City Investment Group and supplement of working capital.

 

 

 

Panel surge, the stock price of a new huge fixed increase after the dividend planning

 

 

 

Display panel industry investment is huge, BOE A has also become in addition to the financial stocks of the "fixed increase king". The number of BOE A's shareholders has been stable over one million in recent years, and BOE A has been questioned by some investors due to its dividend issue after repeated huge fixed-rate increase.

 

 

 

According to the announcement, the offering is targeted at no more than 35 specific investors, including Jing Guorui Fund. Among them, Jing Guorui Fund as the Beijing state-owned capital management center control of the main body, to 4 billion yuan in cash to subscribe for the non-public offering of shares. The issue price of this issue shall not be less than 80% of the average trading price of the company's shares in the 20 trading days prior to the pricing benchmark. After the completion of the issue, the new and old shareholders of the company shall share the undistributed profits rolled over before the issue. This will result in dilution of immediate returns to listed shareholders and reduction of dividends to original shareholders. On the other hand, by the end of the third quarter of 2020, BOE A's monetary fund balance has reached an innovative 62.3 billion yuan, and the monetary fund balance in the past five years has been more than 50 billion yuan. In this regard, BOE A pointed out that the private placement of the company will bring A positive impact on the financial situation of the company, the smooth implementation of the private placement of the project, the company's business scale will be greatly expanded, is conducive to the company's future operating income and profit level of continuous growth, in line with the interests of the company and all shareholders.

 

 

 

At the same time, BOE A announced the next three years shareholder dividend return plan. Except for special circumstances, the company shall have the priority to distribute dividends in cash when the current year is profitable and the accumulated undistributed profits are positive. The profits distributed in cash each year shall be no less than 10 percent of the distributable profits realized in the current year. When the development stage of the company is mature and there is no significant capital expenditure arrangement, the proportion of cash dividend in the profit distribution should reach the minimum of 80%.

 

 

 

According to Wind data statistics, BOE A has achieved A total net profit of about 20 billion yuan and A total cash dividend of about 5.3 billion yuan since its listing, with A dividend rate of 26.57%, ranking in the middle of the industry. Compared with the non-distribution and non-increase in previous years, BOE A has achieved dividend distribution in recent five years, and the dividend ratio has steadily increased.

 

 

 

In the secondary market, BOE A shares recently hit their highest level since June 2008, helped by the continued rise in panel prices. The company's stock price has risen about 40% in the past year and nearly 160% in the past two years. Share price rise behind, is the LCD TV panel in the history of the longest, the biggest rise in price cycle. Li Yaqin, general manager of Group Intelligence Consulting, said the price hike, which began in June last year, is expected to last for 10 months and will last until the first quarter of this year.

 

BOE A recently responded to investors by saying it expects LCD panel supply and demand to remain tight in the first quarter of 2021. In addition, with the expansion of production lines in Chengdu and Mianyang, the company is able to provide more flexible AMOLED products to first-tier brand customers around the world.

 

 

 

The latest rating data showed that the firm unanimously raised its target price on BOE A to 7.85 yuan, representing A 57 percent increase from its target price six months ago. Among them, Hua Chuang Securities believes that panel prices exceed expectations and leading performance is expected to exceed expectations, giving BOE A A target price of 10.5 yuan. Northeast Securities pointed out that the LCD industry is currently in oligopoly competition pattern, led by BOE and TCL Huaxing. In the future, with the production of high-generation production lines of domestic manufacturers, the competitive position of Japanese and Korean manufacturers will weaken, the concentration of LCD industry will further improve, and the localization process will be further advanced. Looking forward to the future, the domestic panel leading industry gradually master the right to speak, industry periodicity is expected to further weaken.

 

 

 

According to data from Runto, in the fourth quarter of 2020, BOE 10.5 generation line investment has reached 50K/ month, and by the end of 2021, monthly investment in parent substrate will reach more than 130K. BOE will have the world's largest shipments of large-size panels and a stronger say in pricing.

 

 

 

In recent years, with the maturity of AMOLED industrialization technology and the expansion of AMOLED application field in the display market, the technical advantages of AMOLED will be fully explored and brought into play. In recent years, Apple iPhone, Samsung Galaxy, Huawei Mate and other mobile phone products use AMOLED display screen, AMOLED display technology is increasingly widely used in the small and medium-sized smart mobile display terminal market, AMOLED product market is developing rapidly.

 

 

 

In addition to smartphones, AMOLED displays have gradually infiltrated more areas such as smartwatches, in-car displays and VR devices. AppleWatch and HUAWEI Watch released successively in 2015 all adopted AMOLED display, and VR devices represented by Oculus Rift and HTC Vive also adopted AMOLED display.

 

 

 

It is predicted that the global shipments of VR devices will increase 2.7 times to 38 million by 2020 compared with 2016, and the AMOLED application market will see explosive growth. Micro OLEDs will benefit from the growth of the virtual reality, mixed reality and other reality markets, which will grow at a CAGR of about 15% from 2015 to 2025.

 

 

 

BOE said it will further diversify its production technology by increasing capital in Chongqing BOE Display and building BOE Chongqing's 6th generation AMOLED (flexible) production line project. In the existing production line, especially in the TFT-LCD production line, most of the production capacity of the company has adopted the very mature A-Si process, and at the same time, Oxide technology has been introduced into a number of high generation production lines that have been put into production, in addition, LTPS technology has been used in the Ordos 5.5 generation production line. BOE Chongqing 6th generation AMOLED (flexible) production line project will use a variety of high-resolution OLED technologies, which is beneficial to the deepening of the company's technology reserves.

 

 

 

At the same time, by investing in the construction of Yunnan Chuanyuji Photoelectric 12-inch silicon-based OLED project, the company can achieve an average annual production capacity of 5.23 million OLED micro-displays. On the one hand, under the guidance of the national continuous industrial policy, the company can capture the market by expanding production capacity and form brand effect. On the other hand, it can increase investment, make breakthroughs in key technological links, speed up catching up with international advanced technologies, and break the monopoly of international giants.

 

 

 

It is worth noting that LCD panel prices have continued to rise since June 2020. According to Insight's latest forecast, the trend will continue until March 2021. Industry experts said that this round of price hikes have two characteristics, one is that the price hike is longer than several times in history. The second is the huge price increase, LCD panels of all sizes have increased by more than 60%, some even more than 80%, the largest increase in the past decade.

 

 

 

Continued rise has also brought huge dividends to each big panel manufacturers. Taking BOE as an example, in Q3 of 2020, the company's revenue reached 40.821 billion yuan, with a year-on-year growth of 33.04% and a quarter-on-quarter growth of 16.67%, hitting a record high in a single quarter. Net profit attributable to the parent was 1.340 billion yuan, up 629.3% year-on-year and 135.66% year-on-year, a record high for a single quarter since Q2 2018. Net profit attributable to the mother after deduction was 1.064 billion yuan, up 226.4% from the previous month.

 

 

 

Influenced by the strong upsurge of LCD panel prices, BOE's share price has risen sharply recently. As of January 15, the closing price was 6.80 yuan, which has increased by more than 31.53% since December 16, 2020, and the total market value reached 236.6 billion yuan.