Reversal Of Demand And Supply Of TV Panels Is Expected To Rebound In 2020.

Although it is in the cold winter, the TV panel industry is greeted with warmth.

Since the beginning of this week, TCL group and BOE A have come to a daily limit, and the panel stocks of Shenzhen Tianma A, visa and San an are also increasing in varying degrees.

After more than a year of "freezing period", the panel industry will have an inflection point. The panel has its own cycle, but the trough at this stage is a bit long. With the continuous release of production capacity of the high generation production line in 2019, this year reached the peak of oversupply, the industry is also facing unprecedented difficulties, and the impact of Sino US trade war on downstream demand, the net profit of LGD, BOE and TCL group dropped.

Up to the end of 2019, there were signs of upward trend in the panel period.

China and Thailand Securities said it expects the supply and demand margins to improve in the future, and the panel industry will see upward trend in 2020. Supply side, even if there are new domestic production lines, Samsung and LGD capacity adjustment plan will improve the overall supply of LCD industry next year. The launch of the European Cup and Olympic Games and the launch of smart screens are expected to accelerate the start of the TV replacement cycle. Through the supply and demand calculation of the global LCD panel industry, the panel industry in 2020 is expected to usher in a new round of business cycles.

Although it is in the cold winter, the TV panel industry is greeted with warmth. - Song Wenhui photo

Warmer demand in 2020

The TV panel in 2019 is really difficult, and you can feel cool from your performance.

LG Display fell into a huge loss. Its earnings showed that the revenue in the third quarter of 2019 was 58216 billion won (about 34 billion 600 million yuan), down 5% from the same period last year, and the operating loss was as high as 437 billion won (about 2 billion 600 million yuan). The accumulated operating loss in the first three quarters was 957 billion 500 million won (about 5 billion 780 million yuan), and the net loss was more than 1 trillion won (about 6 billion yuan).

BOE 2019 three quarterly report shows that the first three quarters of the company achieved a revenue of 85 billion 722 million yuan, an increase of 23.4% over the previous year, and net profit of 1 billion 852 million yuan to the parent company, down 45.18% compared to the same period last year, and the gross profit margin fell 6.5 percentage points year-on-year.

TCL China Star's first three quarter revenue was 24 billion 560 million yuan, an increase of 28.4% over the same period, and net profit of 1 billion 300 million yuan, down 28.7% from the same period last year.

The chill dropped to the end of December and finally rebounded. From the domestic market, it first appeared on the stock price. For this rise, many industry insiders told the twenty-first Century economic report reporter that there are three main reasons: first, the reduction of the production line of LCD (liquid crystal), the decrease of supply side capacity; secondly, the growth of demand side, including the commercial pull of 8K, 5G and AI; third, from the perspective of the environment, the easing of Sino US trade relations has also had a positive impact on the supply and demand relationship.

Li Yaqin, general manager of Sigmaintell, told the twenty-first Century economic news reporter: "on the one hand, the change of the industrial environment is the change in tariff policy of China and the United States last week. The tariffs that were imposed on US $165 billion would not be imposed in December 15th. This will affect many display terminal products, such as tablet computers, notebooks, monitors and so on. And TV, TV originally planned to impose a tariff of 15%, which is now reduced by half to 7.5%. In the face of these positive factors, panel manufacturers, including the relevant parties in the industry supply chain, are more satisfied with the momentum and confidence in the subsequent preparation.

On the other hand, Li Yaqin believes that the demand side has also improved. "For example, the sales of double 11 in the fourth quarter of the year, whether IT or TV products, are better than expected. The sales of black Friday in the US are also good. This is also conducive to the recovery of demand side confidence, and they will be more active in the purchase and demand of the panel.

In addition, the panel manufacturers in the three quarter and the four quarter are cutting crop rate, control capacity. Under the influence of these factors, Group Consulting expects that the price of the panel should rebound in the first quarter of 2020, but at the bottom of the panel price, investors are also predicting that the profit of the panel factory is at the bottom, so the stock price fluctuates.

Chen Yanshun, chairman of BOE, said in an interview recently that LCD showed that the continuous downlink industry cycle was the strongest "cold winter" that the company had ever experienced. The LCD industry is expected to pick up in the first quarter or two quarter of next year.

LCD manufacturers to bet on new technology flows

Among various reasons, it is noteworthy that the dynamics of the major panel manufacturers. On the one hand, the production line of LCD is decreasing. On the other hand, panel makers are looking for "tomorrow star" in technology.

Only from the LCD panel, the capacity advantage has gradually shifted from South Korea to China. In the new round of panel competition, South Korean manufacturers are also accelerating the move to quit LCD. On the route of shrinking LCD, Korean manufacturers are also very determined. According to the statistics of DISCIEN of consulting company, in 2020, two panel factories of LGD and SDC in Korea have drawn up a more radical contraction plan, with shipments cut almost by 46% and 38% respectively.

BOE is also reducing the layout of LCD. Chen Yanshun said that in the future, BOE will stop investing in LCD production lines, focusing more on OLED and emerging Mini LED and Micro LED.

Statistics from DISCIEN show that in 2019 and 2020, 11 TV panel factories had changed in capacity, of which 7 plants would increase production capacity and 4 plants could reduce production capacity.

Although it seems to increase the production capacity more, DISCIEN points out: "according to a certain yield and cutting efficiency, the actual shipment area will be less than 1M in 2020, which will be less than 1% compared with the 2019 159M shipment area. This level of panel shipment area is undoubtedly a drop in the bucket for the annual shipment volume of 7%-10%.

In recent years, the construction of new factories and overlong surplus history have made it easy for people to believe that supply will continue to increase continuously. However, it is important to note that the whole industry is in a period of change. For example, in the past two and a half years, there have been 2.5 10.5 generation planning Stagnation (HKC Zhengzhou 10.5 holding/SDP, the 10.5 generation line of the United States is declining /SDP, Guangzhou 10.5 capacity is facing big changes), coupled with the shrinkage of Korean factories in the LCD industry, the actual increase in shipments will be very limited.

This is also foreshadowing the transformation of the supply and demand relationship of the panel next year. Meanwhile, the panel makers are updating the stock market to find an incremental market.

On the one hand, in addition to OLED, Mini LED and Micro LED two display technologies become delicious. For example, BOE believes that the Mini LED technology will break out in the next two or three years, which is the direction of future development. Next year, BOE will formally launch glass based Mini LED backlight products. Hua Xing also released a 75 inch Mini-LED product MLED, according to Huaxing's plan, the 75 inch 4K product will achieve mass production in the first half of next year. In 2021, the MLED star screen products will be extended to more products, such as direct TV. Samsung has released Micro LED's TV products, and it has also been reported that Samsung will begin large-scale production of Micro LED in 2020.

On the other hand, with the advent of the Internet of things, the ubiquitous screen has become a trend. The panel manufacturers are also seeking more application scenarios at the bottom end. Outside the TV room, there will be new increments outside the living room, such as commercial display, medical treatment and so on. Plus the national 4K ultra high definition industry development action plan and other favorable policies, will also open space for the panel makers, but at the moment, we need time to cultivate the market.