Panel companies that have been very strong late last year and early this year are facing severe challenges.
The First Financial reporter learned from AVC on May 9th that the current price of TV panels has fallen to or near the historical low point of the previous wave of price cut cycles in 2016. It is expected that prices in June this year will continue to decline. , Constantly approaching the panel factory's cost line.
Are leading Chinese companies such as BOE and Huaxing Optoelectronics, which are expanding their TV panel production capacity, able to smooth down this down cycle?
Screen price fell to historical lows
According to the analyst from Ove Cloud Network, the TV panel price has been declining, mainly due to the mass production and ramp-up of new LCD (liquid crystal) high generation panel plants since 2017. The global LCD panel production capacity is accelerating. However, in the short term, the demand for TVs in the whole world, including China, has not been effectively improved. Therefore, after the arrival of the 'World Cup' of the whole plant in April of this year, the oversupply of panels has become more severe, which has accelerated the decline in panel prices.
This round of price reduction covers all major dimensions of the panel.
According to forecast data published by Orvi Cloud on May 9, in May this year, 32-inch, 40-inch, 49-50-inch panel prices will fall by 2 US dollars, 43-inch panel prices will drop by 4 US dollars, and 55-inch panel prices will also Continue to fall, even the oversized 65-inch panel is no exception.
The 32-inch HD (high-definition) panel in the first quarter of 2016 had reached the lowest price point in history, at US$52. It is expected that the 32-inch panel price will fall to US$52 again in May of this year, and there is a possibility of further decline in June. 55-inch UHD (Ultra HD) The panel reached its historical low in May 2016 at $170, and in April this year the price has fallen below $170 to $166.
Qu Yazhi General Manager Li Yaqin also told the First Financial reporter that the price of the TV panel in May of this year compared with May last year, a drop of 25% to 30%.
Overcapacity supply
'The drop was larger than expected, which was related to irrational investment. The main contradiction was that the panel supply grew faster than the panel's demand growth. In the first quarter of this year, global color TV shipments increased by 7%, but panel supply increased by 8% to 9%. In 2018, the global TV panel demand area is expected to increase by 6%, and the supply area will increase by 8%~9%. 'Li Yaqin said.
“The panel industry has a scale effect. The bigger the scale, the more it has the right to speak and the better it survives. Therefore, if Chinese panel companies want to establish themselves in the industry, they must continue to expand the scale. The needs of Chinese companies’ own development plus the capital of local governments Support, causing the supply to increase too quickly in the short term.'
Li Yaqin predicts that with the above-mentioned projects being put into production and mass production in the coming year and next year, the global television panel industry will still face the pressure of oversupply of production capacity in the next two or three years. Therefore, the industry should maintain a cautious, rational attitude and rhythm in investing and expanding production. .
'This panel's wave of price cuts is just as ferocious as previous price increases. The profitability of major panel makers has entered a downward path since the second half of last year. ' Another panel industry analyst, Cui Jilong, said that the large-size panel area shipped worldwide The first LGD suffered a loss in the first quarter of this year. In the foreseeable future months, the profitability of the major panel makers will not be optimistic and will face relatively big challenges.
In the first quarter of 2018, BOE's revenue also fell by 1.32% to 21.57 billion yuan, and its net profit dropped by 16.34% to 2.02 billion yuan; Huaxing Optoelectronics also decreased its revenue by 1.19% in the first quarter of 2018 to 6.46 billion yuan. Through increased production capacity, it reduced costs and optimized The product structure reduced the impact of panel price fluctuations. The interest before tax, depreciation, amortization, and amortization was 2.76 billion yuan, an increase of 9.86% year-on-year.
Last year, the profitability of the panel plant was good, and the performance of the color power plant was not satisfactory. This year, the panel has a surplus supply capacity. The color power plant hopes to get a good price as much as possible and improve its performance. 'IHS analyst Wu Rongbing told the reporter of the First Financial Affairs Bureau.
Against this background, BOE and Huaxing Optoelectronics are actively adjusting the product structure, reducing the production of 32-inch panels, increasing the supply of 43, 49, and 55-inch panels, and promoting the development of large-size TVs.
65-inch panel, BOE Hefei 10.5 generation line production yield has reached 70%, the output is greater than expected, and the oversized TV market to boost the process, so the price declines badly.
However, Wu Rongbing believes that in the long term, this is good for stimulating demand for oversized television.