Shulou(Shulou.com)11/24 Report--

After less than a year of cyclical adjustment, TCL Technology successfully returned to the profitable track in Q2, with a net profit of 890 million yuan in the second quarter, a year-on-year return to profit. At the same time, the reporting of other major panel manufacturers, including BOE, also improved significantly, and the industry ushered in a performance inflection point.

In the first half of this year, the panel industry showed a clear momentum of structural recovery, large-size TV panel volume, prices rose, successfully driving the industry profitability repair, large-size panel leader TCL technology has become the strongest locomotive of this round of recovery.

The analysis predicts that with the deepening of the "supply-side reform" of the panel industry, the "supply-driven" logic of the panel industry will continue to be strengthened; at the same time, the agency's expectation of a continued rebound in downstream demand in the second half of the year has become increasingly clear. Large-size panels are expected to maintain an upward trend, small and medium-sized panels or catch up. Under the intertwined effect of upstream production control and downstream demand rebound, the panel industry may gradually move from structural recovery to comprehensive and moderate recovery in the second half of the year, and a new round of panel cycle may open.

Panel prices continue to warm up to promote the strong recovery of TCL science and technology performance, and the inflection point is established.

TCL Technology disclosed on the evening of August 29 that the company achieved revenue of 85.15 billion yuan in the first half of the year, 0.7% of the same period last year, and net profit of 2.39 billion yuan, an increase of 24.1% over the same period last year. Among them, the profit of the second quarter improved significantly, achieving a net profit of 890 million yuan, which was 15.8 yuan and 1.44 billion yuan higher than the same period last year.

The results of the semiconductor display business improved quarter by quarter, with revenue of 35.53 billion yuan, of which Q2 revenue rose nearly 20 per cent year-on-year and more than 30 per cent month-on-month. It is worth noting that TCL technology's semiconductor display business Q2 loss significantly narrowed, net profit month-on-month loss of more than 2 billion yuan, showing a clear rebound momentum.

Since February, the price of large-size TV panels has achieved "six consecutive increases". The prices of TV panels of 55 inches and above have risen by more than 20%, of which 55 and 65 inch panels have increased by more than 50% this year. The double rise of volume and price of large-size panels has led to the overall warming of the panel market. TCL technology, as the leader of large-size high-end LCD panels, is not only the biggest beneficiary of this round of panel structural recovery, but also the strongest "locomotive" in the recovery market.

Analysts point out that 60 per cent of TCL Huaxing's revenue comes from large panels, and based on the average increase in large panels in the first half of the year, TCL technology's large panel business will bring at least 20 points of gross profit improvement. According to public data, the overall gross profit margin of TCL Technology in the first half of the year has risen to 14.3% from 9.8% of Q1, and profitability has improved significantly.

While the monthly performance inflection point has been successfully established, Huaxing's capacity production line is also accelerating upgrading. T9 production line, which is located in medium-size IT and vehicle business, has successfully mass-produced and climbed the slope, and has completed the introduction of head brand customers such as commercial display, display, notebook and other products, driving the rapid development of the company's medium-size business, accounting for 21% of the medium-size income. In the view of analysts, the upgrading and optimization of TCL Huaxing production capacity structure will effectively promote the balance of TCL technology panel product structure and the continuous improvement of average gross profit margin, which will help to further consolidate the long-term foundation of its recovery.

The supply-driven logic continues to strengthen, and the panel "slow cow" is on its way.

The logic of "supply-driven" in the panel industry is being further strengthened behind the rise in prices to promote the collective recovery of the performance of the leading companies.

In recent years, manufacturers from Japan, South Korea and Taiwan have accelerated their withdrawal from the LCD production line. After the Korean factory LGD announced at the beginning of the year that it would significantly reduce the production capacity of Guangzhou LCD panel factory, in August this year, Japan's JDI and Taiwan's Youda Optoelectronics also announced that they would close two LCD production lines. The backward production capacity of LCD is speeding up, while the investment in the mainland LCD production line is also slowing down, and the pressure on the panel supply side will be further alleviated. The supply side of the industry began to enter an orderly and benign stage of development.

With the continuous improvement of LCD capacity concentration, TCL technology, BOE and other leading manufacturers in mainland China will have a stronger say in the industry. The above analyst pointed out: "at present, the production capacity of mainland panel manufacturers accounts for nearly 70% of the global production capacity, of which Gaoshi generation lines are basically in the hands of leading manufacturers, and their advanced production capacity and bargaining power are relatively high. They have the ability to improve the relationship between supply and demand and maintain price stability by adjusting the farming rate, so as to reduce the cyclical fluctuations of panels."

While supply-side production capacity is gradually shrinking, downstream demand in the industry is also recovering moderately, and panel prices continue to rise. Jibang Consulting predicts that with the year-end festival promotion of domestic and foreign brand stock, TV shipments are expected to increase by 11.9% in the third quarter, reaching 52.24 million units. At the price level, the TV panel continued to rise in late August, and the 32-inch TV panel rose 3.7%, 4.5%, 4.8%, 5.6%, compared with the previous month. Loto and other research institutions predict that prices will still rise in September and will enter a stable or small fluctuation state after October.

In addition, the consumer demand repair of mainstream IT scenarios is expected to make small and medium-sized panels also usher in a round of make-up. At present, mainstream consumer electronics consulting institutions such as IDC and Gartner have predicted that starting from the second half of the year, shipments of mobile phones and PC will enter the range of bottoming out, or form a mild rebound, thus forming a strong support for small and medium-sized panels upstream.

"if the scissors gap of supply and demand increase in the second half of the year is expected to be established, small and medium-sized panels will also usher in a better momentum of recovery, which will further consolidate the foundation of the overall and comprehensive recovery of the panel industry." The analyst said, however, he also pointed out, "if nothing happens, the recovery of the panel industry in the second half of the year will continue, and there will be no big ups and downs in the panel market in the short term, but a moderate and balanced recovery." showing a typical 'slow cow' characteristics. "

The new cycle of the panel set sail, and the profitability of leading enterprises has improved steadily.

In recent years, the production capacity clearance and industry management strategy adjustment of large factories in Japan and South Korea have formed a round of "supply-side reform", and have gradually begun to step into the deep water area. With the further concentration and stability of the competition pattern in the future, the panel industry is expected to repeat the successful experience of iron and steel, storage and other industries, and enter a benign new cycle of high-quality and sustainable development.

"historically, the steel and storage industries have eliminated backward low-end production capacity and integrated industry resources, resulting in a highly concentrated and moderate industry competition pattern, which led the industry into a stable profit situation. This precisely verifies the logic of the current supply-side reform of the panel industry, and provides a romance for the long-term development of the panel industry to some extent." The above analysis said that after a year of adjustment, the new cycle of the panel industry may have begun to hit the road, and showing new characteristics: the strong are always strong, the long-term value of big head manufacturers will be gradually released and realized, and leading manufacturers such as TCL technology and BOE will be the main beneficiaries. "

In the long run, the panel, as the core information carrier and the main interactive interface in the digital economy era, is irreplaceable and the industrial value is sustainable for a long time. On the other hand, the globalization layout of the whole industry is early and deep, and the core technology of leading Chinese enterprises is also in a highly autonomous and controllable state, and there is little possibility of being impacted by international economic and trade disputes in the future. this will create the foundation for its long-term, sustainable and benign new cycle in the future.

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