Display Panel Industry Will Get Opportunities to Rise

Specifically, in 2019, the number of global LCD TV panels shipped was 283 million, with a slight year-on-year decrease of 0.2%, and the shipping area was 160 million square meters, with a year-on-year increase of 6.3%. Among them, BOE's shipping area exceeded that of Korean manufacturer LGD for the first time, ranking first in both shipping quantity and area. Specifically, as BOE's world's first g10.5 generation line continues to climb, And reached full production. In 2019, its total shipment reached 53.3 million pieces, a year-on-year decrease of 1.8%, the shipment area reached 29.12 million square meters, a significant year-on-year increase of 24.6%, and the company's LCD TV panel production capacity increased by more than 20% year-on-year in 2019.

From the perspective of market competition pattern, in terms of shipment volume, the top five brands of global LCD TV panel shipment in 2019 are BOE (53.3 million units), qunchuang Optoelectronics (43.8 million units), LGD (41.5 million units), Huaxing Optoelectronics (40.3 million units) and Samsung display (31 million units); In terms of shipping area, the top five manufacturers are BOE (29.1 million square meters), LGD (26.5 million square meters), Samsung display (21.3 million square meters), Huaxing Optoelectronics (20.8 million square meters) and qunchuang Optoelectronics (19.8 million square meters).

Based on the above, it can be seen that under the imbalance of supply and demand in the previous year, with the capacity transformation of traditional Korean panel manufacturers or the withdrawal from the market one after another due to changing the strategic direction, the domestic panel capacity seized the opportunity, caught up from behind and began to be further released. The data show that in 2018, mainland China surpassed South Korea and became the largest source of LCD panel capacity, It is estimated that more than 40% of the global production capacity will come from mainland China after 2020. Therefore, the potential development of China's panel industry is still relatively good.

However, it should be noted that since the recent epidemic of new pneumonia is still in the control stage, epidemic prevention measures such as delaying the resumption of work may have a certain negative impact on the panel production capacity. In particular, Wuhan, as one of the main panel production bases, enterprises including Huaxing optoelectronics, shentianma and Jingdong have set up panel factories there. In this special period, Due to the shortage of raw material supply, the reduction of relevant production capacity may make its price continue the previous price rise cycle. It is expected that the price of 32-65 inch panel will be increased by US $1-2 in February to maintain a high prosperity, which will bring some good performance to the incoming enterprises. According to the research report given by relevant securities companies, the following stocks may be concerned:

Related stocks of the display panel concept:

TCL Group (00100. SZ): the company is engaged in the production of audio tapes, and later expanded to the fields of telephone, television, mobile phone, refrigerator, washing machine, air conditioner, small household appliances, LCD panel and so on. In 2018, the operating revenue was 113.36 billion yuan, a year-on-year increase of 1.60%; The net profit was 4.07 billion yuan, a year-on-year increase of 14.7%; Among them, the net profit attributable to shareholders of listed companies was 3.47 billion yuan, a year-on-year increase of 30.2%. In the first three quarters of 2019, the operating revenue was 14.957 billion yuan, a year-on-year decrease of 49.70%; The net profit attributable to shareholders of listed companies was 1.395 billion yuan, a year-on-year increase of 54.31%. TCL stressed that at present, the company's material inventory can meet the current production needs, but affected by the epidemic, the supply of some production materials may be delayed for a short time due to factors such as delayed resumption of work by suppliers and poor logistics. However, T3 and T4 factories of TCL Huaxing producing small and medium-sized products are located in Wuhan. They are produced and operated as planned during the Spring Festival, and the current delivery channel of finished products is normal.

BOE a (000725. SZ): the company is an Internet of things company that provides intelligent port products and professional services for information interaction and human health. Its core businesses include display and sensor devices, intelligent systems and health services. In 2018, the company's revenue was 97.11 billion yuan, a year-on-year increase of 3.53%; The net profit attributable to the parent company was about 3.44 billion yuan, a year-on-year decrease of 54.61%; The company plans to pay out 10.3 yuan for 10 shares. In the first three quarters of 2019, the operating revenue was 85.7 billion yuan, a year-on-year increase of 23.4%; The net profit attributable to shareholders of listed companies was 1.85 billion yuan, a year-on-year decrease of 45.18%. The basic earnings per share is 0.053 yuan. BOE said that all its factories, including Wuhan plant, were operating normally. At present, BOE's generation 10.5 line is not in mass production and is still climbing.

Changxin Technology (300088. SZ): the company specializes in the R & D, production, sales and service of vacuum film materials in flat panel display devices. Its products include ITO transparent conductive glass for liquid crystal display (LCD), ITO transparent conductive glass for touch panel, touch glass Thinning glass and other flat panel display devices are the key basic materials upstream of the flat panel display industry, such as vacuum film products. In 2018, the revenue was RMB 9.615 billion, a year-on-year decrease of 11.66%; The net profit attributable to the shareholders of the listed company was 712 million yuan, a year-on-year increase of 30.79%; The basic earnings per share is 0.31 yuan; In the first three quarters of 2019, the operating revenue was 4.64 billion yuan, a year-on-year decrease of 34.86%; The net profit attributable to shareholders of listed companies was 712 million yuan, a year-on-year increase of 17.09%. The basic earnings per share is 0.3097 yuan.

Shentianma a (000050. SZ): it is a professional company producing LCD, focusing on the consumer display market of mobile terminals and professional display markets such as vehicle mounted, medical treatment and industrial control. In 2018, the revenue was 28.912 billion yuan, a year-on-year increase of 21.35%; The net profit attributable to the shareholders of the listed company was 926 million yuan, a year-on-year decrease of 15.17%; The basic earnings per share is 0.46 yuan. In the first three quarters of 2019, the operating revenue was 23.4 billion yuan, a year-on-year increase of 7.74%; The net profit attributable to shareholders of listed companies was 1.03 billion yuan, a year-on-year decrease of 15.03%. The basic earnings per share is 0.5048 yuan. Shentianma announced that its subsidiary Wuhan Tianma Microelectronics Co., Ltd. faces certain pressure on the supply of some raw materials. However, from the current situation, the company's material inventory can meet the current production needs, and will strive to ensure the mobilization of subsequent raw materials on demand.

Crystal Optoelectronics (002273. SZ): the company has become a leading large-scale R & D and manufacturing enterprise in the optical optoelectronics industry in China. Its business fields include optical optoelectronic components, new displays, semiconductor lighting, reflective materials, high-end equipment and other industries. In 2018, the operating revenue was 2.33 billion yuan, a year-on-year increase of 8.39%; The net profit attributable to shareholders of listed companies was 468 million yuan, a year-on-year increase of 31.57%. The basic earnings per share is 0.55 yuan. In the first three quarters of 2019, the operating revenue was 2.07 billion yuan, a year-on-year increase of 26.43%; The net profit attributable to shareholders of listed companies was 360 million yuan, a year-on-year decrease of 11.18%. The basic earnings per share is 0.32 yuan.

Conclusion:

On the whole, under the influence of the epidemic, all walks of life, including panels, may be affected by a series of uncertainties. Among them, due to the delay of production capacity shipment, according to the logic of supply exceeding demand, there may be room for price expansion and increase, which is conducive to the stable layout of incoming domestic manufacturers. However, it should be noted that the impact of the epidemic on the industry may be limited, After all, in the long run, with the further release of market demand in the later stage, the relative balance between supply and demand may make the city scene look higher again. Especially driven by sports events such as this year's European Cup and Tokyo Olympic Games, the supply, demand and price of panels may be positively stimulated. For this, relevant market investors should maintain an optimistic and cautious attitude.