BOE and TCL analyze the latest trends in the current panel market on their positive performance in the first half of the year

Recently, “panel duo” BOE and TCL Technology released the 2021 semi-annual report. The two companies achieved record highs in the first half of the year. BOE revenue exceeded 100 billion yuan for the first time, and net profit increased by more than 10 times year-on-year; TCL Technology revenue increased by 153.3 year-on-year %, the net profit attributable to the parent increased by 461.5% year-on-year.

The cyclical increase in upstream panel prices has led to an overall increase in the average price of the downstream color TV industry. The rare phenomenon of “decreasing in volume and increasing” appears after the “double decrease in volume” in the market, and TV companies increase revenue without increasing profits. To this end, Skyworth, Hisense, TCL, etc. have launched new display technologies. Skyworth is deeply involved in the OLED TV track, Hisense is committed to the promotion of laser TVs, and TCL takes Mini LED as the focus of future development, and different brands have embarked on their own differentiated competition paths.



The performance of panel companies hit new highs

According to a report by CINNO Research, a semiconductor display industry consulting organization, in the first half of 2021, global LCD TV panel shipments were 130 million pieces, an increase of 2.5% year-on-year, and the shipment area was 83.12 million square meters, an increase of 10.3% year-on-year. In the first half of 2021, three domestic head manufacturers, BOE, TCL Huaxing, and Huike HKC, accounted for 50.9% of the total global shipment area of ​​LCD TV panels, which is more than half for the first time.

In the first half of the year, BOE achieved revenue of 107.285 billion yuan, an increase of 89.04% year-on-year, and achieved a net profit of 12.762 billion yuan attributable to shareholders of listed companies, a year-on-year increase of 1023.96%. Among them, the sales volume of display devices increased by 18% year-on-year, the sales area increased by 45% year-on-year, the sales volume of complete 3C products increased by 38% year-on-year, and the sales area of ​​innovative application devices increased by 66%

TCL Technology achieved operating income of 74.3 billion yuan, a year-on-year increase of 153.3%; realized net profit of 9.25 billion yuan, a year-on-year increase of 7.65 times; net profit attributable to shareholders of listed companies was 6.78 billion yuan, a year-on-year increase of 461.5%. During the reporting period, TCL Huaxing achieved a sales area of ​​17.792 million square meters, a year-on-year increase of 25.3%. The semiconductor display business achieved operating income of 40.8 billion yuan, a year-on-year increase of 93.6% on the same caliber, and a net profit of 6.61 billion yuan, a year-on-year increase of 6.75 billion yuan. In the second quarter of the year, it achieved a net profit of 4.21 billion yuan, an increase of 76% from the first quarter.

BOE said that in the first half of the year, the semiconductor display industry’s prosperity continued to improve, industry integration accelerated, and resources were further gathered to leading companies; TCL Technology stated that TCL Huaxing, as a leading company in the semiconductor display industry, fully benefited from the industry’s upward trend. Through endogenous growth and extensional mergers and acquisitions, the company continued to expand its scale and maintained its leading position in the global industry in terms of efficiency and effectiveness.

The color TV industry is shifting to high-end large screens

According to the “Report on China’s Home Appliances Market in the First Half of 2021″, affected by the price increase of key upstream components represented by display screens and chips, the average sales price of color TV products has been greatly increased. The rare market phenomenon of “deduction and increase”, the overall market retail sales was 58.1 billion yuan, a year-on-year increase of 15.8%, and retail sales fell by 11.0% year-on-year.

From the perspective of interim performance data, in the first half of the year, TCL Electronics’ TCL Smart Screen, Hisense Video’s Smart Display Terminal Business, and Skyworth’s Smart TV System have all increased compared to the same period last year. Konka’s color TV business revenue has increased year-on-year. Decrease by 0.86%.

It is worth noting that the gross profit margin of various TV products has declined as a whole, of which Konka TV has a gross profit margin of 5.44%, a year-on-year decrease of 9.33%. TCL Electronics’ gross profit margin was 15.9%, a year-on-year decrease of 4.7 percentage points; Skyworth Group’s gross profit margin was 16.6%, a year-on-year decrease of 2.7 percentage points.

Affected by upstream procurement costs and pressure on profitability, color TV companies are actively transforming their marketing strategies to promote high-end large-screen products. As the growth rate of small-size panels is higher than that of large-size panels, affected by this, the size structure of color TV products is accelerating to upgrade to ultra-large sizes over 65 inches and even over 85 inches. In the first half of the year, TCL Smart Screen’s sales of 65 inches and above in the Chinese market accounted for 25.1%.

At the same time, the long-term price war for LCD TVs has also prompted companies to upgrade their display technology and launch high-end products. This year, Skyworth released two latest products, 88-inch 8K OLED TV and transformable OLED TV. According to statistics, in the past 9 years of OLED mass production, Skyworth has 16 generations, 26 series, and 40 products; in August, TCL held a Mini LED strategy conference. In the future, the sales penetration rate of TCL Mini LEDs in large sizes will exceed 60%. Mini LED smart screens will achieve an annual production capacity of 10 million units in 2024

Cyclical fluctuations affect demand in the second half of the year

After experiencing the longest price upward period in history, the semiconductor display industry is gradually emerging from strong cyclical fluctuations. According to the latest research of Qunzhi Consulting, the third quarter of this year has entered the second half. With the transformation of supply and demand, the right to speak in the LCD TV panel market has shifted from upstream to downstream in the supply chain. Demand side and export demand dropped significantly, and domestic domestic market inventories rose. The panel stocking strategy of TV manufacturers has turned conservative, and demand has dropped rapidly, which will undoubtedly affect the development of the color TV industry.

In order to reduce the impact of cyclical fluctuations in the panel industry, TCL Technology stated at the mid-term performance exchange meeting that there will be “three measures” to deal with: First, the orderly growth of production capacity, according to market demand, grasp the pace of increase in production capacity, and expand sales to offset future panels. The impact of price cuts; the second is to optimize the layout of the production line, deploy the best and most efficient products of each production line, continue to improve the efficiency of production line configuration, and increase the proportion of non-TV screens and mid-to-high-end screens; the third is optimization Customer portfolio, relying on the advantages of the supply chain, to increase the proportion of high-end products and comprehensive competitiveness.

At the performance briefing meeting, BOE pointed out that in this round of price increases in the semiconductor display industry, it is very important that all resources are concentrated in leading companies, regardless of the brand market, raw material supply market, and various links in the industrial chain. One exception. At present, TV market prices have fallen, in fact, there are factors that have corrected the excessively rapid price increases in the previous period.

Post time: Sep-10-2021