The industry's warming demand is strong, "burning money king" BOE short-term recovery?
BOE, which has long-term losses in its main business and was labeled as “burning money king†by investors, recently released a performance correction notice, which is expected to achieve a net profit of 600 million to 650 million yuan in the first half of the year, and the correction will be raised to 820 million. 860 million yuan. In the same period last year, the loss was 780 million yuan. After BOE achieved a net profit of 286 million yuan in the first quarter of this year, the net profit of the first half of this year showed a substantial increase, and the profits were obtained by the main business of LCD panel. This time, it is not government subsidy.
In an interview with Nandu reporter, Zhang Dong, vice president of BOE, said that the LCD panel industry's recovery, BOE's own scale effect improvement, and policy-level escorts are the reasons for BOE's performance to overturn. Many analysts said that in the next few years, the global LCD panel production line capacity will not increase too much, and demand will continue to maintain strong growth, therefore, the entire LCD panel industry will maintain a high degree of prosperity.
Net profit in the first half of the year or over 800 million
Since investing huge sums of money into the LCD panel industry, the shadow of loss has been entangled in BOE like a nightmare. BOE's financial report over the years shows that since the 5th generation line was put into production in 2005, BOE has turned from making money to losing money, and has been lingering between loss and no loss, including losses in 2005 and 2006, and profit in 2007, 2008 to 2010. The annual profit is -1.66 billion yuan, -1.305 billion yuan, and -2.32 billion yuan. After three years of huge losses, BOE realized a profit of 150 million in 2011 and a profit of 258 million yuan in 2012. The small profits in 2011 and 2012 were all realized by government subsidies, and the LCD panel of its main business was still a loss.
However, the situation has gradually reversed since the third quarter of last year. In the quarter, BOE's main business realized a net profit of 150 million yuan, which was the first time since 2009 to achieve a single quarter profit. In the first quarter of this year, the situation improved further. The BOE one quarterly report showed that the company achieved operating income of 8 billion yuan, a year-on-year increase of 94.3%; net profit attributable to shareholders of listed companies was 286 million yuan, an increase of 158%. On April 25, BOE issued a performance forecast, which is expected to achieve a net profit of 600 million to 650 million yuan in the first half of this year.
The good news came one after another. On July 10, BOE released the announcement of the 2013 semi-annual performance pre-increased amendment. It is estimated that the company's net profit attributable to shareholders of listed companies from January to June 2013 was 820 million to 860 million, which is significantly higher than the previous performance forecast. increase.
In addition to BOE, another 8.5-generation LCD panel company Huaxing Optoelectronics also achieved a profit of 410 million yuan in the first quarter of this year, becoming TCL's "profit cow".
Strong industry warming demand
From loss to profit, the most critical driver is naturally the shift in market demand.
"Since the second half of last year, the LCD panel industry has rebounded, demand has gradually increased, and prices have gradually rebounded. Since the beginning of this year, the company's production lines have been fully sold. Although the company continues to increase production capacity, it still cannot meet customer demand and market demand. It is indeed very strong.†Zhang Yu told the Southern Reporter that it was precisely because of the warming of the market that the environment changed and the whole industry ushered in an inflection point.
At the same time as the market warms up, for BOE, another important factor in the substantial increase in profits is the continuous increase in economies of scale. An important reason for the continued loss of BOE in previous years, apart from the market downturn, is that the company has been in the investment stage. With the release of Beijing's 8.5-generation line capacity, BOE's scale effect has emerged, and the bargaining power of raw materials has increased. At present, BOE has 4.5, 5, and 6 generation lines for small-size panel production, and Beijing's 8.5-generation line is responsible for medium-sized panel production.
Zhang Yu emphasized that with a rich product line, it is possible to put the right products on a more suitable production line, thus saving costs. On the other hand, the rich product line can also meet the various needs of customers, and the viscosity of customers is also significantly enhanced. "For example, the screen for a 10.1 inch tablet computer is cut with a 5th generation line. The utilization rate of the glass substrate is only 80%. However, when the 6th generation line product is used for cutting, the glass substrate utilization rate will reach 90%. There are many more benefits."
In addition, the national policy level has also strengthened support for the domestic LCD panel industry. In 2012, the country increased the import tariff on LCD panels from 3% to 5%, which enhanced the price advantage of domestic panel products. It is reported that the import tariff of LCD panels in mainland China may further increase to 8% in the future.
Domestic overcapacity in 2015?
Under the influence of multiple factors, BOE and Huaxing Optoelectronics reported good results, but the worries from the market did not reduce much. As there are still many 8.5-generation lines under construction in China, and it is expected to be put into production around 2015, the market is generally worried that by 2015, the LCD panel industry will have overcapacity, which will make the domestic LCD panel industry fall into a trough again.
Regarding market concerns, Liu Liang, an analyst in the electronics industry of Industrial Securities, said that there is no need to worry too much. Liu Liang pointed out that the global panel expansion peak was in 2006, when the capacity increased by 55%. After that, it gradually slowed down. In 2011, the global panel production capacity increased by about 15%. In 2012, the capacity growth rate dropped to 7%. It is estimated that the global panel production capacity will increase by about 4% in 2013 and 2014. The market for TVs, tablets, smartphones, and ultrabooks will continue to grow at a high rate, and the demand for LCD panels will continue to grow strongly. Therefore, there will be no oversupply.
Zhang Yu also stressed that from a global perspective, the incremental capacity of LCD panels in the next two years will mainly come from the mainland of China, and the capacity of the mainland will increase, facing the global market. The consumer electronics industry will continue to grow at a high rate in the next few years, and the demand for LCD panels will continue to grow. Therefore, the problem of digesting these capacity will not be great.
There is still a concern in the market that OLED will replace LCD as the mainstream of the market, which will make the huge investment in the LCD production line in China in recent years. In this regard, Hualian Optoelectronics CEO Bo Lianming made it clear that OLED has a long way to go before the technology matures and scales, and it is impossible to replace LCD in the short term. Even if one day OLED replaces the LCD, the LCD production line can be transformed into an O LE D production line.
(This article is reproduced on the Internet. The texts and opinions expressed in this article have not been confirmed by this site, nor do they represent the position of Gaogong LED. Readers need to verify the relevant content by themselves.)
In an interview with Nandu reporter, Zhang Dong, vice president of BOE, said that the LCD panel industry's recovery, BOE's own scale effect improvement, and policy-level escorts are the reasons for BOE's performance to overturn. Many analysts said that in the next few years, the global LCD panel production line capacity will not increase too much, and demand will continue to maintain strong growth, therefore, the entire LCD panel industry will maintain a high degree of prosperity.
Net profit in the first half of the year or over 800 million
Since investing huge sums of money into the LCD panel industry, the shadow of loss has been entangled in BOE like a nightmare. BOE's financial report over the years shows that since the 5th generation line was put into production in 2005, BOE has turned from making money to losing money, and has been lingering between loss and no loss, including losses in 2005 and 2006, and profit in 2007, 2008 to 2010. The annual profit is -1.66 billion yuan, -1.305 billion yuan, and -2.32 billion yuan. After three years of huge losses, BOE realized a profit of 150 million in 2011 and a profit of 258 million yuan in 2012. The small profits in 2011 and 2012 were all realized by government subsidies, and the LCD panel of its main business was still a loss.
However, the situation has gradually reversed since the third quarter of last year. In the quarter, BOE's main business realized a net profit of 150 million yuan, which was the first time since 2009 to achieve a single quarter profit. In the first quarter of this year, the situation improved further. The BOE one quarterly report showed that the company achieved operating income of 8 billion yuan, a year-on-year increase of 94.3%; net profit attributable to shareholders of listed companies was 286 million yuan, an increase of 158%. On April 25, BOE issued a performance forecast, which is expected to achieve a net profit of 600 million to 650 million yuan in the first half of this year.
The good news came one after another. On July 10, BOE released the announcement of the 2013 semi-annual performance pre-increased amendment. It is estimated that the company's net profit attributable to shareholders of listed companies from January to June 2013 was 820 million to 860 million, which is significantly higher than the previous performance forecast. increase.
In addition to BOE, another 8.5-generation LCD panel company Huaxing Optoelectronics also achieved a profit of 410 million yuan in the first quarter of this year, becoming TCL's "profit cow".
Strong industry warming demand
From loss to profit, the most critical driver is naturally the shift in market demand.
"Since the second half of last year, the LCD panel industry has rebounded, demand has gradually increased, and prices have gradually rebounded. Since the beginning of this year, the company's production lines have been fully sold. Although the company continues to increase production capacity, it still cannot meet customer demand and market demand. It is indeed very strong.†Zhang Yu told the Southern Reporter that it was precisely because of the warming of the market that the environment changed and the whole industry ushered in an inflection point.
At the same time as the market warms up, for BOE, another important factor in the substantial increase in profits is the continuous increase in economies of scale. An important reason for the continued loss of BOE in previous years, apart from the market downturn, is that the company has been in the investment stage. With the release of Beijing's 8.5-generation line capacity, BOE's scale effect has emerged, and the bargaining power of raw materials has increased. At present, BOE has 4.5, 5, and 6 generation lines for small-size panel production, and Beijing's 8.5-generation line is responsible for medium-sized panel production.
Zhang Yu emphasized that with a rich product line, it is possible to put the right products on a more suitable production line, thus saving costs. On the other hand, the rich product line can also meet the various needs of customers, and the viscosity of customers is also significantly enhanced. "For example, the screen for a 10.1 inch tablet computer is cut with a 5th generation line. The utilization rate of the glass substrate is only 80%. However, when the 6th generation line product is used for cutting, the glass substrate utilization rate will reach 90%. There are many more benefits."
In addition, the national policy level has also strengthened support for the domestic LCD panel industry. In 2012, the country increased the import tariff on LCD panels from 3% to 5%, which enhanced the price advantage of domestic panel products. It is reported that the import tariff of LCD panels in mainland China may further increase to 8% in the future.
Domestic overcapacity in 2015?
Under the influence of multiple factors, BOE and Huaxing Optoelectronics reported good results, but the worries from the market did not reduce much. As there are still many 8.5-generation lines under construction in China, and it is expected to be put into production around 2015, the market is generally worried that by 2015, the LCD panel industry will have overcapacity, which will make the domestic LCD panel industry fall into a trough again.
Regarding market concerns, Liu Liang, an analyst in the electronics industry of Industrial Securities, said that there is no need to worry too much. Liu Liang pointed out that the global panel expansion peak was in 2006, when the capacity increased by 55%. After that, it gradually slowed down. In 2011, the global panel production capacity increased by about 15%. In 2012, the capacity growth rate dropped to 7%. It is estimated that the global panel production capacity will increase by about 4% in 2013 and 2014. The market for TVs, tablets, smartphones, and ultrabooks will continue to grow at a high rate, and the demand for LCD panels will continue to grow strongly. Therefore, there will be no oversupply.
Zhang Yu also stressed that from a global perspective, the incremental capacity of LCD panels in the next two years will mainly come from the mainland of China, and the capacity of the mainland will increase, facing the global market. The consumer electronics industry will continue to grow at a high rate in the next few years, and the demand for LCD panels will continue to grow. Therefore, the problem of digesting these capacity will not be great.
There is still a concern in the market that OLED will replace LCD as the mainstream of the market, which will make the huge investment in the LCD production line in China in recent years. In this regard, Hualian Optoelectronics CEO Bo Lianming made it clear that OLED has a long way to go before the technology matures and scales, and it is impossible to replace LCD in the short term. Even if one day OLED replaces the LCD, the LCD production line can be transformed into an O LE D production line.
(This article is reproduced on the Internet. The texts and opinions expressed in this article have not been confirmed by this site, nor do they represent the position of Gaogong LED. Readers need to verify the relevant content by themselves.)
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