The panel prices that have been declining since the second half of 2017 have finally bottomed out in May. According to data released by Quzhi Consulting, the current panel prices have slipped to the lowest point since 2016.
The price of 32 baht dropped from US$73 a year ago to US$46, a decrease of 37%, 40吋, 50吋4K, and 55吋4K were 44%, 37%, 25%, respectively, and 65吋 large screen dropped from US$409. To 257 US dollars, a decrease of 37%.
According to industry sources, Qunzhi’s data is pretty good, and the actual price quoted by the screen factory for the entire plant is even lower. At present, the quotation from Taiwan’s 32-item factory has been reduced to US$40, which is almost equal to the cost price, and the industry’s earnings pressure is huge.
The most optimistic estimate is that with the advent of the traditional peak season, panel prices will stabilize and stabilize in the second half of the year. However, there are also comments that from the current launch of the higher generations, it is highly probable that large-screen prices will continue to decline in the future. The Chi Consultancy's model estimates that in the second quarter global TV panel supply-demand ratio was 9.4%, still oversupply.
The high-generation expansion of China's panel industry is still continuing. On the evening of May 22, TCL Group announced that it invested 42.6 billion yuan to build a second G11 (T7) in Shenzhen, cutting 65-inch and 8K screens, and 65-inch and 75-inch OLED screens. Among them, Huaxing Optoelectronics invested 13.3 billion, Shenzhen Development Fund invested 7 billion, and Samsung, which holds 5% of China Star, will not participate in the investment. The T7 has a design capacity of 90,000 pieces. It is expected to light up in 2020 and mass production in 2021.
T7 is the global 10.5 (11) generation line that is determined to be the sixth in the world, of which five are all in China, including BOE Hefei and Wuhan, both 10.5 generation lines, China Star Optronics Shenzhen T6, Foxconn Guangzhou 10.5 generation line, the only overseas project It is LG South Korea 10.5 generation line. Foxconn originally planned to invest in the United States to build the second 10.5 generation line, but the latest news, Terry Goh has already adjusted the plan to 8.5 or 6th generation line.
After a year of hard work, the whole plant finally ushered in the glory of victory. The price of the panel has dropped and the demand has slowly recovered. It is only three weeks before the World Cup. Can the color TV companies seize the opportunity to win?
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Cycle fluctuations and dynamic balance are the norm in the panel industry. After experiencing a price drop in 2015, from the second half of 2016 to 2017, the 14-month rise has hit the longest price rise in history, but in the long run The trend remains unchanged. According to BOE Chairman Wang Dongsheng, the panel price has fallen by half every 36 months and it now appears that this cycle is being shortened.
In 2017, BOE’s share price doubled, its market value exceeded 200 billion yuan, and the “Great Power” successfully turned over. In the first quarter of 2018, BOE took over 12.5 million LGs to be the global TV panel leader, and Huaxing Optoelectronics ranked 9.4 million globally. Fourth place. BOE panel shipments of BOE and Huaxing have approached the total number of Korean factories.
In the next three years, with the release of six 10.5 generation lines, the replacement effect of large screens will intensify, and the low-generation line will face transformation. The competitiveness of companies that cannot invest in new lines will decline, and they may even be eliminated. Those who lack technology accumulation, Followed by the trend, the new plant across the border to build the line pressure.
With a strong willingness to invest and government support, China has become the world's largest panel manufacturing base. It is in the question of 'overcapacity' that has continued for many years. China has created two giants, BOE and China Star Optoelectronics. TV is rapidly gaining popularity, entering the 4K era from SD.
In 2018, the trend of large-screen, 8K is already very clear. Not only television, the arrival of the Internet of Things era will create more application scenarios. On the other hand, panel price decline is driving the TV size to continue to upgrade, while the average size of LCD TVs is increasing. 1. You will consume an 8.5 generation line.
The cost advantage of the high-generation line, smart factory popularity, supporting industries is maturing, panel prices will not make the screen factory unprofitable. BOE 2018Q1 gross margin and net margin of 20.8% and 9%, the same period AUO gross margin The net interest rate is 10.9% and 5.4%. After the Hefei 10.5 generation line is fully sold in 2018, the structural advantages of large size will be more obvious. Four generations of Gaoxing Optoelectronics, which follows the BOE, are all concentrated in Shenzhen Guangming District. Such a high-density world is rare, greatly improving the efficiency of matching.
For Chinese panel companies, the real challenge is not the excess production capacity, but the uncertainty of technological innovation. Will advancements in new display technologies such as OLEDs and MicroLEDs usher in another update in the LCD industry?
2018 coincides with the 50th anniversary of the birth of LCD. At the Los Angeles SID show that opened on May 23rd, the flexible foldable screen is blooming. BOE, Shen Tianma, and JDI exhibited new products of ultra-thin flexible AMOLED, including a thickness of only 0.03. Mm dynamic suspension flexible AMOLED screen, and the world's smallest dynamic bending, bending flexible radius of only 1mm flexible AMOLED screen.
It is said that a number of Chinese mobile phone makers such as Huawei are preparing to launch an 8-inch foldable mobile phone. Although Apple iPhone 8 sales are not as expected, the replacement trend of AMOLED to LTPS has been irreversible.
BOE 5.99吋 Dynamic Suspension Flexible AMOLED Display
Large screen OLED is still only LG one push, it seems that OLED in the big screen to replace the LCD long way ahead. LG this time the world's first 77 吋 transparent OLED screen. Although TCL did not exhibit SID, the new T7 has clearly put forward the layout 65-inch and 75-inch OLEDs. Currently TCL's Juhua Display can only print OLEDs for 31 inches, but by 2021, the situation may be completely different.
LG Display's World's First 77-inch Transparent Flexible OLED Panel
After the 2017 color TV industry finally ushered in warming up. Quarterly report shows that in 2018 Q1 Hisense electrical revenue 7.811 billion yuan +16.5%, Sichuan Changhong revenue 18.85 billion +13.3%, TCL Multimedia Q1 revenue 10.85 billion Hong Kong dollars +28%, LCD TV sales were 6.37 million units +35.6%, revenue and sales were the biggest increase in nearly 5 years.
According to AVC data, in 2017 the domestic color TV market sales of 47.52 million units, down 6.6 percent, the biggest decline in 14 years after demand dropped to the freezing point, in 2018 the industry expected to pick up, coupled with the panel prices fall, the whole The factory has more room for maneuvering.
TV panel prices and corporate earnings have much relevance? To 32 inches, for example, since 2013, 32-inch panel price fluctuations, from $ 110 in early 2013 highs falling as low as 50 dollars in 2016, rose to 80 in early 2017 In the long run, the US dollar still has a 27% decline.
Earnings data show that in addition to the 2013 loss of TCL Multimedia, mainstream TV companies in 2017 gross margins were lower than in 2013, accounting for over 60% of the overall cost of the panel price cuts, and TV companies did not make a profit rise. The same is true in 2018, Hisense Electric gross margin of 15.2%, 0.8 percentage points year on year to enhance, TCL multimedia Q1 gross margin of 15.8%, only 0.1 percentage points year on year upgrade.
Since 2012 curve is relatively flat gross margin in the first quarter of 2016 reached record highs, that's what the panel of the low price, but in the long run, the last six years of no growth margin of mainstream TV companies, one important reason is the competitive landscape dispersion.
The market share of the color TV industry is less than 20%, and there is no true oligarch. Since 2013, the entry of Internet brands has further exacerbated the decentralized competitive landscape, resulting in a lower price share, which has dragged down the profitability of the entire industry.
After taking LeTV, Sharp and Xiaomi came again, and the price war continued in 2018. According to AVC data, the sales volume of China's color TV market was 12.15 million units in the first quarter of 2018, an increase of 3% year-on-year. The retail sales volume was 40.2 billion yuan, a year-on-year increase. 3.3%, average price increases slightly.
During the May 1st May 2018, the price of the mainstream brand of 55-inch large-screen TV fell below 2,000 yuan, and the price of 65-inch was lowered to 3,499 yuan. However, the price cut did not bring about the expected explosion, according to data from Yikang, 2018. During the period, the retail volume of the color TV market was 3.94 million units, a year-on-year decrease of 12.4%, and retail sales of 12.5 billion yuan, a year-on-year decrease of 26%. With a lower base figure in 2017, there was still a double-digit decline, indicating that the market was bleak.
World Cup delivery capacity is lower than expected, and 618 is about to open the traditional peak season. How can color TV companies stimulate demand?
After ten years of rapid development, TVs have entered the stock market incrementally. The penetration rate in the first-tier cities exceeds 100%. The three-tier and four-tier markets are also approaching saturation. The upgrade has become the main theme of the industry.
From big screen, 4K to voice and AI, color TV companies have been spared no effort to give more reasons for replacement. In 2018, the product structure improvement of color TV industry has achieved initial results. AVC offline monitoring data shows that 4K TV shares in the first quarter of 2018 It reached 68.7%, an increase of 7.2% over the same period of last year. The OLED TV share was 0.7%, an increase of 0.4% year-on-year, and the sales volume doubled.
Today's TV technology innovations are faster, with more directions, from quantum dots to OLEDs and laser televisions, but for users, choosing more may mean no choice. The newly acquired TV will either face an upgrade two years later, or A large devaluation, the surface is an example.
The color TV industry is still in the long transition from cost advantage to differentiation advantage. Before the product differentiation, it is difficult for color TV to establish a brand image and obtain a higher premium. Hisense's large screen laser, Skyworth bet OLED, TCL select quantum The point is, no matter if it is to strengthen the differentiated qualities of the product, then it will reshape the brand.
The bigger challenge comes from the outside rather than from the inside. It is not a better TV that defeats TV, but mobile phones and ubiquitous fragmented entertainment. According to TCL Multimedia CEO Wang Cheng, TV companies need to be time solution providers. Create more value for the user to realize the value of the company.
In addition to audiovisual enjoyment, what high value-added TV? 5G technology, Internet of things, AI and smart home, large screen carrying too many possibilities and new hopes. The current channel between smart TV technology and application scenarios Not completely open, still in trial and error and iterative period, but after all, it has been on the road.
The attempt of platformization of color TV companies has been recognized by the capital market. Skyworth's cool open attracted Tencent, Baidu has a stake, valuation has reached 10 billion, TCL Thunderbird just over 1 year later got Jingdong after Tencent. The investment of 300 million yuan. In May 2018, TCL Multimedia announced that it had invested RMB 300 million in the shareholding of LeTV’s new music company, holding 2.7%. LeTV’s myth shattered, but its created content model attracted a large number of followers.
In the past decade, color TV companies have been using price cuts to serve the people, and cost advantages have become more of a consumer dividend. In the face of dramatic changes in the times, consumption upgrades have become a new enthusiasm, the sharing economy has replaced the search economy, and user needs from 'buying cheap' Become a 'buy better.' From product to brand, for the comprehensive transformation of smart home, the challenges of color TV companies have only just begun.
The down cycle of the panel has been turned on. Is it going to take the old road and use the price war zone, or seize the opportunity to reshape itself and complete the value revaluation?