According to the results of AUO, Innolux's announcement, AUO's EPS after last year was 3.36 yuan per share, and Innolux was 3.72 yuan, both the best figures in the past 10 years, and it also surpassed many with 3D. Sensing, optical lenses and other sensational stocks. If we then calculate the ultra-low stock prices of the two companies, we estimate the ratio of dividend yields to be 60% to 70%. Both companies have a chance to exceed 15% in cash rate this year. , Has become the largest industrial share with the highest yield in recent years.
Looking back at the past 10 years, the panel industry can be said to have experienced nine deaths. Each company has suffered huge losses and high liabilities. Among them, after the combination of Innosoft and Chi Mei in 2010, the debt amount reached a maximum of 450 billion yuan, and it has become an executive. The hospital ordered the bank not to withdraw the money from the bailout. Nowadays, the panel industry has gone through the gates of ghosts for a short time. It is rare to survive until now. The leading factory and AUO have all found their own way of business, and they have started business with companies like South Korea and China. The next stage of competition.
Samsung dominates China's aggressive progress
Observing the global panel industry's competitive situation, Korean businessmen have mastered their own brands such as TVs and mobile phones. They did not receive much impact after the financial tsunami in 2008. Therefore, Samsung, LGD (Legen Panel) continued to expand TFT-LCD (Thin Film Transistor LCD Display) panel production capacity, will also invest heavily in AMOLED (active organic light emitting display), now mastered more than 90% of the world's market share, including Apple's iPhone X and Samsung's most advanced mobile phones, with AMOLED as the main panel.
As for China, which has relied heavily on the supply of Taiwan's panels 10 years ago, it has also begun large-scale investment in recent years. It has actively expanded its capacity above the 10th generation line and is now surpassing TFT panels to catch up with Korea, becoming the country with the largest capacity in the world.
In contrast, for Taiwanese companies with significant losses from 2009 to 2012, due to poor financial status, they can only significantly reduce their capital expenditures. In the past three years, depreciation and amortization has decreased. In droves, AUO's annual depreciation is in the range of 70 billion to 1,000 billion yuan. Between the yuan, but in the past five years has been significantly reduced, which AUO has been reduced to several billion to 100 billion yuan; Innocent figures are slightly higher, at most are all between 34 billion yuan.
After 2013, Innolux, AUO's profitability and financial figures were stable, and there was still only a small increase in capital expenditure. The emphasis was placed on value enhancement and differentiation. Not only did the list of losing money fail, it did not blindly fight for the scale of production. Optimized product portfolio to produce high value-added and cost-effective products, from panel providers to display solutions factory.
Strategic Transformation Going out of its Way
Through this strategy of “pursuing value and not producing capacity,” panel tigers have gradually come out of their own path in recent years. Taking the product mix as an example, in the past, the proportion of products in the panel industry was almost all TVs, laptops and monitors. Such as the largest application, these are almost standard products with little difference in specifications, and the profit is very thin; but now they are expanding towards mobile phones, industrial control, automotive and consumer electronics. The proportion of these value-added panels has been significantly increased.
From the aspect of AUO's product mix last year, the overall value-added panel accounted for 50% of revenue, and it hopes to continue to grow in the future. Because of the increase in the proportion of value-added panel, the gross profit margin of panel dual tigers can be gradually improved. The early negative numbers increased to single digits, and they could be raised to about 10% last year. Both of them also set the best number of EPSs last year.
For the new capital expenditures, the two companies are preoccupied with each other. It is important to spend each penny on the knife edge. Take AUO as an example, AUO Chairman Peng Shuanglang bluntly said, Now that the 10.5 plant, AMOLED plant investment is hot, China The industry is actively investing, but these new plants have low capital recovery rates and it is difficult to see results in the short term.
AUO needs to increase its capital turnover rate and increase its high-quality production capacity. It will not easily increase capital expenditures without orders. For example, Kunshan LTPS (low-temperature polysilicon) panel plant was fully loaded at the end of the third quarter of last year, and will still maintain full production this year. In addition, this year, Taichung will continue to operate in the second half of this year. Afterwards, there were 8.5 new production lines put into operation. The current production capacity is also full.
Peng Shuanglang said that AUO’s technological innovation is more important than productivity improvement. For example, the 8K panel of new television technology. The 85 吋 8K TVs of major brands at this year's CES (Consumer Electronics Show) are all using AUO Panels, and will also expand. LTPS platform, in addition to 18: 9 full-screen mobile phones, will also extend the application to high-end laptops, cars, in-flight entertainment systems, etc. It is expected that this year will be gradually volume production.
In addition, in research and development of the latest technology, the dual-Tiger Micro LED, Mini LED, are also invariably investing in R&D resources. Take Innolux as an example, the Mini LED has been published at this year's CES exhibition and has been launched with the depot. In cooperation, it is expected that the goods can be exported within two years. Since the automotive industry is a long-term cooperation order, it is estimated that there will be a steady growth of at least 5 years. Infineon’s executive vice president Ding Jinglong said, “Taiwan has not kept pace with the AMOLED panel investment. It's too late, but if you can successfully develop the Mini LED and Micro LED, you will have the opportunity to send the AMOLED panel to the refrigerator. ”
Looking forward to the future, the Panel Tigers will gradually develop their respective characteristics. AUO’s development orientation focuses on the pursuit of value-added in commodities. In addition to the panel, AUO also provides a total solution for hardware and software integration. Software applications enhance the unique value of hardware.
Peng Shuanglang said that, for example, 4K panels will account for more than half of the total TV panel shipments this year, and 18:9 full-screen panels will also be equipped with special-shaped cutting, In-Cell touch control, and other commercial panels such as automotive and industrial control. Will increase resources, increase the proportion of revenue.
As for the innolux of Hon Hai Group, Hong Hai Chairman Guo Taiming cuts into the upstream panel industry, including Guangzhou's 10.5 generation line and the US panel factory. Together with the Japanese summer plant, the Hon Hai Group is expected to become a 5 year company. Overcoming the Korean panel leader. In the future, during Hon Hai Group's construction of the panel kingdom, waiting for the expansion of panel parts production, it is imperative to expand downstream outlets. Innolux expects to play a more critical role in the shipment of complete systems. .
The bottom is still rising
Xiao Zhihong, general manager of Innolux, predicts that Innolux will turn to a one-stop vertical integration of the complete machine. It is expected that the monthly production capacity will increase from more than 100,000 units at the beginning of this year to 500,000 units at the end of the year. Become an overall system service provider, provide PID (Public Message Display Solution), large video wall, conference system, etc.
In addition, Innolux has been actively pursuing automation in recent years. The number of employees from the top 130,000 employees has been cut to 30,000 employees. Through the automation of production automation, it has now dropped to more than 50,000.
However, the biggest stress test for the panel industry this year is obviously the active expansion of factories from China. Last year, China shipped 94.70 million TV panels, accounting for 36.1% of the world's total, surpassing Vietnam and South Korea to become the world's No. 1; BOE 10.5 this year. Substitute line and the 8.6th generation of CLP Group will be mass-produced. How will the supply and demand of the panel change? This is also an important factor in the operation of the dual panel tigers.
Because of this, even if the price/net ratio of the two companies is between 0.5 and 0.6 times, the yield rate for this year is expected to exceed 15%. However, for Innolux, AUO's performance outlook for the next two years is not optimistic about foreign investment. , The average investor still stays in the past "misfortune" impression. Can the Panel Tigers "turn over" in this regard? It still needs time to verify.