The price of TV panels of all sizes accelerated in March, and it is expected that the price of LCD TV panels of all sizes will continue to rise in April.
The Zhitong Finance App learned that Guoxin Securities released a research report saying that the price of TV panels of all sizes rose at an accelerated pace in March, and it is expected that the price of LCD TV panels of all sizes will continue to rise in April. As LCD production expansion comes to an end, the industry will shift from being dominated by the supply side in the past (changes in production capacity) to being dominated by the demand side (demand for large, high-end, and diversified terminals). The cyclical nature of the industry will fade, growth attributes will show, and the profit stability of LCD panel companies is expected to gradually strengthen. The LCD panel industry chain focuses on recommending BOE A (000725.SZ), TCL Technology (000100.SZ), etc.
Guoxin Securities's views are as follows:
Price: The price of TV panels of all sizes accelerated in March, and it is expected that the price of LCD TV panels of all sizes will continue to rise in April
TV: March 2024 32, 43, 50, 55, 65-inch LCD TV panel prices were 37, 62, 106, 130, 175 per piece, up 5.7%, 3.3%, 2.3% month-on-month; Omdia expects 32, 43, 50, 55, and 65-inch LCD TV panels to be priced at 39, 64, 109, 134, 179 US dollars/piece in April, up 5.4%, 3.2%, 2.8% month-on-month , 3.1%, 2.3%. According to TrendForce, TV brands increased their panel procurement efforts in March, driving a 7% quarterly increase in procurement volume in the first quarter, and the operating rate of panel manufacturers to rise above 80%. It is anticipated that in the second quarter, panel manufacturers will produce on demand, driven by sporting events, new product stocking, and 618 promotions, which will help TV panel prices continue to rise.
Notebooks: In March 2024, 10.1-inch (tablet), and 23.8-inch (monitor) LCD IT panels cost $17.0, 26.3, and 44.0, changing -0.6%, 0.0%, 2.3% month-on-month; Omdia expects the price of 14-inch LCD IT panels to remain flat month-on-month on April 10.1, and the price of 23.8-inch LCD IT panels will increase 3.4% month-on-month to $45.5.
Supply & demand: In January, the global shipping area of large LCD panels increased by 24.82% year on year, including the shipping area of TVs, monitors, notebooks, and tablets increased year on year
On the supply side, the bank expects the global large-size LCD production area to increase by 2.48% in 2024 compared to 2023, of which 1Q24, 2Q24, 3Q24, and 4Q24 production capacity will increase by 0.72%, 0.35%, 0.26%, and 0.62%, respectively; the global large-size LCD production area is expected to increase 2.09% in 2025 compared to 2024, of which 1Q25, 2Q25, 3Q25, and 4Q25 production capacity will increase 0.62%, 0.61%, and 0.61%, respectively. 0.00% On the demand side, in January 2024, the global shipping area of large LCD panels increased 24.82% year on year. Among them, global LCD TV panel shipping area increased 22.77% year on year, global LCD panel shipping area increased 35.17% year on year, global laptop panel shipping area increased 30.90% year on year, and global tablet panel shipping area increased 27.15% year on year. The bank believes that as LCD production expansion comes to an end, the industry will shift from being dominated by the supply side (changes in production capacity) to being dominated by the demand side (demand for large, high-end, and diversified terminals). The cyclical nature of the industry will fade, growth characteristics will show, and the profit stability of LCD panel companies is expected to gradually strengthen.
Investment suggestions: LCD panel industry chain focuses on recommending BOE A, TCL Technology, etc.
The bank is optimistic that domestic panel leaders such as BOE A and TCL Technology will seize the dividends of the era of China's consumption upgrade and localization, and gradually achieve a steady increase in profitability through the scale effect, cost advantage, and industry voice and pricing power brought about by the leading market share of the higher generation line. At the same time, as LCD prosperity gradually bottomed out and picked up, upstream raw material manufacturers such as Sanilipu (002876.SZ) are expected to gradually recover in performance. In addition, the bank continues to recommend Kangguan Technology (001308.SZ) and Shiyuan Co., Ltd. (002841.SZ), which are benefiting from the recovery in demand for smart interactive tablets.
Risk warning: risk of demand for display devices falling short of expectations; risk of price fluctuations of display devices; risk of supply of production equipment and raw materials.