Due to stronger-than-expected demand for Television, panel manufacturers may not make annual maintenance adjustments during the Lunar New Year period, and the prices of Television panels still have room for increase under strong demand.
According to Zhituo Finance APP, Guosen released a research report stating that, according to TrendForce, the continuation of the domestic old-for-new policy in January has driven Television demand, while international brand clients are about to start restocking for the new year, expecting overall demand to remain stable. Due to stronger-than-expected television demand, panel manufacturers' capacity may not undergo seasonal maintenance adjustments during the Lunar New Year, and there is still room for television panel prices to rise under strong demand. Currently, the LCD industry capacity is gradually stabilizing, accompanied by shutdowns and sales of production lines by overseas manufacturers, the industry share is expected to further concentrate, allowing the supply side to better regulate LCD TV panel prices under the advantage of concentrated shares, gradually diminishing the industry's cyclical attributes, showcasing growth attributes, and the profitability stability of LCD panel companies is expected to gradually strengthen.
Guosen Securities' main points are as follows:
Performance Review:
According to Omdia data, the global monthly revenue of large-size LCD panels in November was 5.57 billion dollars, an increase of 5.73% month-on-month and 9.71% year-on-year, among which Boe Technology Group, Tcl Corporation, and Huike had year-on-year revenue growth of 11.52%, 11.19%, and 5.11% respectively. In Q3 2024, the average gross margin of major LCD manufacturers in China (Tianma Microelectronics, Tcl Corporation, Boe Technology Group, Caihong Display Devices, Infovision Optoelectronics(Kunshan) Co., Ltd., AUO, Innolux, and HanYu) decreased by 0.77 percentage points year-on-year and 0.56 percentage points month-on-month to 14.91%, while the net margin increased by 0.15 percentage points year-on-year and decreased by 0.69 percentage points month-on-month to 1.75%.
Prices: In December, the prices of 65-inch LCD TV panels increased month-on-month, and it is expected that prices for all sizes of LCD TV panels will grow month-on-month in January.
Television: In December 2024, the prices of 32, 43, 50, 55, and 65-inch LCD TV panels are 36, 62, 101, 126, and 173 dollars per unit, respectively. Except for the 65-inch TV panel price which increased by 0.6% month-on-month compared to November, the prices of LCD TV panels for other sizes remained flat month-on-month; Omdia estimates that in January, the prices of 32, 43, 50, 55, and 65-inch LCD TV panels will be 37, 63, 102, 128, and 175 dollars per unit, reflecting a month-on-month growth of 2.8%/1.6%/1.0%/1.6%/1.2%. According to TrendForce, the continuation of the domestic old-for-new policy in January has driven Television demand, while international brand clients are about to start restocking for the new year, expecting overall demand to remain stable. Due to stronger-than-expected television demand, panel manufacturers' capacity may not undergo seasonal maintenance adjustments during the Lunar New Year, and there is still room for television panel prices to rise under strong demand.
Laptops: On December 10, 2024, the prices for 10.1-inch (tablet), 14-inch (laptop), and 23.8-inch (monitor) LCD IT panels are $16.4, $26.2, and $44.1 respectively, remaining unchanged month-on-month; Omdia predicts that in January, the prices for 10.1-inch, 14-inch, and 23.8-inch LCD IT panels will be $16.4, $26.2, and $44.1 each, remaining stable month-on-month.
Supply & Demand: In November, the global shipment area of large-sized LCD panels increased by 19.97% year-on-year, with year-on-year growth in TV, monitor, notebook, and tablet shipment areas.
On the supply side, it is expected that the global large-size LCD production capacity area will increase by 2.31% in 2024 compared to 2023, with quarter-on-quarter changes of +0.72%, +0.35%, +0.25%, and -0.02% for 1Q24, 2Q24, 3Q24, and 4Q24 respectively; in 2025, the global large-size LCD production capacity area is expected to increase by 0.21% compared to 2024, with quarter-on-quarter changes of -0.02%, -0.02%, 0.00%, and +0.16% for 1Q25, 2Q25, 3Q25, and 4Q25 respectively.
In terms of demand, the global shipment area of large-sized LCD panels in November 2024 increased by 19.97% year-on-year, with global LCD television panel shipments growing by 21.46%, global LCD monitor panel shipments growing by 8.32%, global laptop panel shipments growing by 23.43%, and global tablet panel shipments growing by 23.51%.
Investment advice: Key recommendations for the LCD panel industry chain include BOE Technology Group, etc.
Bullish on BOE Technology Group (000725.SZ) and other domestic panel leaders to seize the era dividend of China's consumption upgrade and localization. With the scale effect, cost advantage brought by high-generation lines, and the industry discourse power, pricing power gradually improve profitability. At the same time, the rise of the LCD industry has enhanced the competitiveness of domestic TV brands and ODM in going global, recommending Shenzhen MTC (002429.SZ), Kang Jiong Technology (001308.SZ), Guangzhou Shiyuan Electronic Technology (002841.SZ), etc.
Risk Warning
Risks of demand for display devices falling short of expectations; risks of price fluctuations in display devices; risks related to the supply of production equipment and raw materials.
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