At the end of October, the world's major panel makers announced their third-quarter earnings. The market is still not optimistic about the major panel makers, and the loss will be the main theme. Interestingly, however, compared with the loss of profits of panel makers of Korean and Taiwanese companies, most of the revenue of land-based panel makers has increased, but profits have decreased or lost.
In the past two years, the global LCD panel companies have increased their output faster than the market demand. The oversupply has occurred, and the unit price of the panel has generally fallen. The entire panel industry is in a downturn, especially in the large-size LCD TV panel field. This is especially true. Next, take a look at the financial results of the third quarter of 2019 for each panel manufacturer.
Korean Department: Looking for new growth points and reducing production two steps
First of all, let's take a look at the situation of Korean double-star Samsung and LGD. Samsung Electronics released its third-quarter earnings report on September 31, 2019, with Samsung's small and medium-sized OLED panel sales strong, display panel business. The consolidated revenue for the third quarter was 9.26 trillion won (approximately 56.003 billion yuan) and the profit was 1.17 trillion won (about 7.076 billion yuan).
According to Samsung's financial report, the profit of the display panel business mainly comes from the mobile display, which is the small-sized panel market. Compared with the same period of last year, the sales of OLED panels were strong, which increased the capacity utilization rate and reduced the cost. However, due to Samsung's capacity expansion in a wider industry, it is still losing money in the large-size large-panel business.
In terms of LGD, according to the financial report released on the 23rd, the operating loss in the third quarter of this year (July-September) reached 473 billion won (about 32.642 billion yuan), which was greater than the market expectation of 320.3 billion won (about 1.937 billion yuan) last year. In the same period, the profit was 17.5 billion won (about 105 million yuan); revenue decreased by 4.6% to 582 million won compared with the same period of last year, which was lower than the market estimate of 599 million won.
LG Display said: "The reason for the slight decline in sales of OLED TV panels this year is that the output of the Guangzhou plant is lower than expected." Meanwhile, LGDisplay said that the goal of the Guangzhou plant is to operate normally this year.
In fact, LG Display's plant in Guangzhou began operations at the end of August, and its output has not reached the expected level. The reason is that it is possible to use the new panel production technology with the plant and lead to unstable production. However, industry insiders said: "The demand for OLED TVs has not been strong recently, and it will not have much impact on panel manufacturers in a while. However, if LGD's OLED panel production continues to be blocked, it will inevitably affect the shipment forecast of OLED TV next year. ""
The proportion of OLED TV sales in China's high-end TV market increased from 8.8% in 2017 to 12.3% in 2018. In 2019, the sales of OLED TVs in China's high-end TV market continued to increase. In the first five months of 2019, the sales of OLED TVs in China's high-end TV market of over 10,000 yuan increased to 14.9%.
Currently in the Chinese market, including LG, Skyworth, Sony, Konka, Changhong, Philips, Levi, Hisense, Panasonic, nine brands have launched OLED products. From a global perspective, the number of color TV companies entering the OLED camp has expanded from three in 2014 to the current 15, and the camp is expanding and developing very rapidly.
It is worth mentioning that at this stage only LGD has the ability to mass produce large-size OLED panels, and next year will be the best development opportunity for LGD. If LGD's OLED panel supply is not stable, it will inevitably affect its overall business plan and deployment.
Korean panel makers are still obvious in terms of technological advantages. Samsung controls the mid-to-high-end OLED small-size panel market, while LGD is in a loss stage, but it faces a technical and market advantage window in the face of a good OLED large-size market. .
Looking back at the panel makers of Taiwan, on October 9, Taiwan panel maker Innolux has released its third quarter revenue report. Innolux's third quarter of 2019 was self-consolidated and revenues were NT$63.3 billion (approximately RMB 14.71 billion), a decrease of 14.4% from the same period last year and an increase of 0.2% from the combined revenue for the second quarter of 2019. Large-size combined shipments totaled 30.63 million units, a decrease of 0.9% compared with 39.09 million units shipped in the second quarter of 2019; combined shipments of small and medium-sized units totaled 63.9 million units, and shipments in the second quarter of 2019 were 5,985 units. Compared with 10,000 tablets, it increased by 6.8%.
On October 30th, Taiwan panel maker AU Optronics also announced the third quarter financial report for 2019. According to the report, AUO’s third-quarter revenue was NT$70.05 billion (approximately RMB 16.2 billion), which was the same as the second quarter of 2019, with a net loss of NT$3.99 billion (approximately RMB900 million). Compared with the loss of 2.6 billion yuan in the second quarter, it was lower than the profit of 4.3 billion yuan in the same period last year.
In terms of panel shipments, AUO's shipments of large-size panels in the third quarter of 2019 exceeded 28.67 million, an increase of 5.5% from the second quarter of 2019. In the third quarter of 2019, the shipment of small and medium-sized panels was approximately 35.6 million, an increase of 7.8% compared with the second quarter of 2019.
AUO said that although the third quarter was a traditional peak season, the market demand was less than expected, and the shipment area increased compared with the previous quarter. However, as the market continues to release new capacity, panel prices continue to decline. Faced with such market conditions, Peng Shuanglang, chairman of AUO, said: "The manufacturers will make dynamic adjustments one after another."
According to the latest survey conducted by TrendForce Optoelectronics Research (WitsView), since the price of TV panels is generally lower than the cost of cash, including panel manufacturers in mainland China, South Korea and Taiwan, they have reduced the capacity utilization rate of TV panel products and reduced production operations since September. Hope to improve supply and demand and stabilize prices.
Trendjing senior research manager Wang Jingyi pointed out that Samsung Display (SDC) was hit by the brand's fourth-quarter TV panel purchase demand, and in September and October, the South Korean 7th generation line and the 8.5th generation line were significantly reduced. (LGD) will also close part of the production capacity of P7 (7.5 generation line) and P8 (8.5 generation line). It is estimated that only one quarter of P8 will be produced by the end of 2019, and P7 will also be closed in October. One-quarter capacity.
As for the Taiwanese factory, AUO has reduced 8A (8.5 generation line) and 6B (6th generation line) from September. Among them, 8A is mainly affected by the price and demand of 55-inch panel. The fourth quarter is estimated. Only about 50% left; 6B is a 65-inch drop, which is expected to decrease by 20% in the fourth quarter.
The TV panel is mainly due to the large-scale production capacity of the mainland, which makes the panels of various sizes continue to fall. It is expected that at least in the second quarter of 2020, when the families start to stock up for the spring new products and the Tokyo Olympics, the price of TV panels will be stable.
Looking forward to the fourth quarter, although TV panel quotations have started to fall in October, but for manufacturers, there is still no opportunity to make money, coupled with the impact of inventory price loss, the single quarter operation is more than the third quarter The level of difficulty is still quite high. AUO said that the panel industry has entered a traditional off-season, and the balance between supply and demand will continue. Appropriate adjustments will be made in terms of production capacity, and at the same time, the development of new products will be accelerated by the off-season, new markets will be opened up, and profits will be boosted to survive the low tide of the industry.
Landline manufacturers: Actively deploy new areas and wait for 5G+8K market opportunities
Although mainland panel makers are not immune to the downturn of the whole industry, relying on government subsidies, huge domestic market, and OLED field, most manufacturers have achieved an increase in revenue, but they have declined in terms of profits. Or partial loss.
Let me talk about the leading manufacturer BOE. On October 30, it released the third quarter and the first three quarters of 2019. In the third quarter, the company achieved revenue of 30.7 billion yuan, a year-on-year increase of 18.05%. The net profit attributable to shareholders of listed companies was 184 million yuan, down 54.49% year-on-year, and the non-net profit loss was 840 million yuan, down 33.216% year-on-year;
In the first three quarters, BOE realized revenue of 85.7 billion yuan, a year-on-year increase of 23.40%. Net profit attributable to shareholders of listed companies was 1.852 billion yuan, down 45.18% year-on-year, and non-net profit loss was 189 million yuan, down 110.13% year-on-year. What needs to be pointed out here is that BOE received government subsidies of 1.433 billion yuan in the first three quarters, and the investment income was 86.94 million yuan.
BOE has gradually increased its investment in flexible AMOLED panels, which supply flexible AMOLED products for Huawei Mate X handsets. At the same time, BOE also mentioned that the company has shipped 10 million flexible OLED panels in the first half of this year, with a market share of 18%, ranking second in the world.
Flexible AMOLED
According to IHS Markit, sales of OLED panels are expected to reach US$20.7 billion in 2019. The share of the smartphone market is expected to exceed TFT-LCD for the first time, reaching 50.7%, and the market share will reach 73% in 2025.
After the 6th generation flexible AMOLED line of Chengdu was put into production last year, the 6th generation flexible AMOLED line of Mianyang was put into production again in July this year. The 6th generation flexible AMOLED project of Chongqing is also under construction.
Even if the panel industry is in a downturn, BOE is still doing capacity expansion and is actively investing in new areas of foreseeable growth. With BOE's continued investment in the OLED field, it is expected to surpass Samsung to become the leader of AMOLED in terms of shipments in the future.
On the same day, October 30, TCL Group also disclosed the results of the third quarter of 2019, and we took out the data of some of the panel's Huaxing Optoelectronics. The data shows that Huaxing achieved operating income of 24.56 billion yuan in the first three quarters, an increase of 28.4%. The net profit was 1.30 billion yuan, down 28.7% year-on-year.
Also on October 30, Shen Tianma released the third quarterly report for 2019, which showed that the company achieved revenue of 8.826 billion yuan, an increase of 13.69% year-on-year; net profit attributable to shareholders of listed companies was 390 million yuan, down 10.28% year-on-year. The non-net profit was 269 million yuan, a year-on-year increase of 66.56%.
Shentianma achieved revenue of 23.4 billion yuan in the first three quarters, up 7.74% year-on-year; net profit attributable to shareholders of listed companies was 1.034 billion yuan, down 15.03% year-on-year; non-net profit was 545 million yuan, up 7.25% year-on-year. . When Zhongshen Tianma received government subsidies of 560 million yuan in the first three quarters.
On October 28, Visionox released the report on the third quarterly report of 2019, showing that the first three quarters achieved revenue of 1.884 billion yuan, a year-on-year increase of 102.45%. The net cash flow from operating activities was 313 million yuan, a year-on-year increase of 251.72%. The non-net profit loss of the listed company's shareholders was 564 million yuan, and the loss was further narrowed year-on-year.
Visionox has deployed 6 generations of flexible AMOLED projects in both Gu'an and Hefei, and this year's 6-generation flexible AMOLED module project is also being built in Guangzhou. It is worth mentioning that Visionox became the screen supplier of multi-mobile phone brand terminals such as Xiaomi MIX Alpha and LG G8s ThinQ during the third quarter. As the capacity of Visionox AMOLED is gradually released and stabilized, this will be its performance. Bring positive impact.
Then on October 29, Rainbow shares released the results report for the first three quarters of 2019. According to the announcement, the company's operating income for the first three quarters was 4.068 billion yuan, a year-on-year increase of 404.73%. The net profit attributable to shareholders of listed companies was 700 million yuan, a loss of 267 million yuan in the same period last year. After deducting the net profit loss of 1.496 billion yuan, a loss of 377 million yuan in the same period last year.
For the growth of revenue, Rainbow shares indicated that the first and second phases of LCD panels have been consolidated and the revenue of panel products has increased; the revenue of products after the G8.5 glass substrate post-processing production line has been consolidated. Although revenue growth, the increase in operating costs was mainly due to the increase in sales of products and the increase in revenue, and the related sales costs and transportation costs increased significantly.
Landline panel makers have basically achieved revenue growth, but the main reason for the decline or loss of profits is the investment in future business and expansion. Among them, flexible AMOLED has become a battleground for the military in at least one or two years.
We can see the expansion of the 6th generation flexible AMOLED production line including BOE, Shenzhen Tianma, Visionox and Huaxing Optoelectronics, and the speed is fast, the project is spread all over the country, such as the 6th generation flexible AMOLED line of BOE Chengdu, Mianyang 6th generation flexible AMOLED line; Shenzhen Tianma Wuhan 6th generation flexible AMOLED line, door 6th generation line project; Weixin Nuo'an and Hefei 6th generation flexible AMOLED project, Guangzhou 6th generation flexible AMOLED module project; Huaxing Optoelectronics Wuhan 6th generation flexible AMOLED production line project Wait.
Of course, it is still too early for flexible AMOLED to become the market's toon, but we have released various new products such as folding screens and waterfall screens from the downstream brands of major terminals this year, which proves that this market is sought after for flexible AMOLED. On the other hand, the foldable screen mobile phone still faces difficulties in technical difficulties and mass production. In a short period of time, it is impossible to see a large number of shipments, and the market still needs to be cultivated.
For land-based manufacturers, although a considerable part of the resources are now invested in the small-sized panel market, there is no plan to stop for the large-sized panel field. Faced with the continued decline in the price of large-size LCD TV panels, the operating pressure of land-based manufacturers is also increasing. According to BOE: "The BOE Hefei 10.5 generation line is already fully produced, and Wuhan 10.5 generation is also under construction."
With the launch of Huaxing Optoelectronics Shenzhen 10.5 generation line, it is expected to hit the second half of the LCD TV panel industry in the second half of the year. “The shipment of large-size panels is accelerating. Although the panel price decline has caused considerable operating pressure, the market cannot give up.” People said.
As the production capacity of large-size panels of land-based manufacturers is continuously released, this has increased the impact on the global panel industry, especially the Taiwanese manufacturers. However, in the third quarter, such as laptops, cars, industrial controls, games, entertainment and other products with different terminal types, the panel market still has considerable opportunities.
In addition, 5G and 8K will be expected by the industry, and many people expect it to bring new markets and revenues to the panel industry. Sony, Samsung, Sharp, etc. have already had 8K TVs, and we have seen that recently, such as TCL, Konka, etc. have released their latest 8K products, the biggest change is that the price of 8K TV has been compared with a year or two ago. A sharp decline has gradually fallen into the more rational and reasonable pricing in the consumer sector, and at that time it is believed to be a market outbreak.