On the evening of January 20, the semiconductor display industry leader BOE A released a performance forecast, and it is expected that the net profit in 2021 will be 25.7 billion yuan to 26 billion yuan, an increase of 410% to 416% year-on-year. The net profit of nearly 26 billion yuan has created a record high since the listing of BOE A.
One year's profit is more than the previous twenty years combined. BOE A was listed in 2001, and the cumulative net profit attributable to the mother in the first two decades was 22.492 billion yuan.
In this regard, the secondary market did not buy it, and BOE A's stock price fell by about 15% in the best performance year. Why?
Best results ever
Last year was the strongest profitable year for the panel industry, and panel giant BOE A released the best performance forecast in history.
On January 20, BOE A performance forecast showed that the company expects to achieve operating income of 215 billion yuan - 220 billion yuan in 2021, an increase of 59% - 62% year-on-year; it is expected to achieve a net profit attributable to shareholders of listed companies of 25.7 billion yuan - 26 billion yuan, an increase of 410% - 416% year-on-year. The growth rate of non-net profit is even higher, and its net profit after deducting non-recurring gains and losses is expected to reach 23.794 billion to 24.094 billion yuan in 2021, an increase of 791%-802% over the same period last year.
From a historical point of view, regardless of whether it is before or after deduction, BOE's net profit in 2021 has created a record high since its listing in 2001, and the last high point of net profit was 7.568 billion yuan in 2017.
For the reasons for the sharp increase in performance, the company said that first, the semiconductor display industry in 2021 continued the longest boom cycle in history in the first half of the year; since the third quarter, with the adjustment of the demand side, the price of industry products has undergone a structural correction, but the overall prosperity of the industry throughout the year is relatively high compared with last year, and the company has benefited as an industry leader.
Second, in terms of LCD, in the face of structural adjustment of product prices, the company relies on good products, customer structure, technical strength, and product strength to actively adjust the product portfolio, and still maintains a good level of profitability. Third, in terms of flexible OLED, we gave full play to the advantages of technology and production capacity, built a broad and close customer cooperative relationship, rapidly increased shipments, and made important breakthroughs in business development, and the single monthly shipments in December 2021 exceeded the tens of millions for the first time.
There are hidden concerns in the market
According to the data, BOE Technology Group Co., Ltd. was founded in April 1993, is an Internet of Things company that provides smart port products and professional services for information interaction and human health.
After years of development, BOE has become a global leader in the field of semiconductor display. In 2020, the company's total display screen shipments ranked first in the world, with five mainstream applications and multiple innovative applications leading the world in market share.
This time, the panel giant BOE A released the best performance forecast in history, but from the market trend of BOE A in the recent period, it seems that the market has not positively reflected this good data.
Since the end of April last year, boe A's stock price has been "falling and falling". Stuck in a six-month-long correction, it touched 4.73 yuan at the end of October, a correction of 38%, and maintained a narrow range around 5 yuan for nearly three months. The company's latest market value is about 190 billion yuan, which is far from the highest value, and the dynamic price-earnings ratio is only about 7 times.
The latest performance forecast also confirms the market's hidden worries to a certain extent - the panel industry has entered a downward cycle.
It is understood that the semiconductor display industry in 2021 continued the longest boom cycle in history in the first half of the year. Panel prices have been loosening since July, and the decline accelerated in August and September.
Wind data shows that the price of 55-inch LCD panels was as high as $228 in June and July 2021, and by December of that year, it had fallen to $121, a six-month plunge of about $100.
BOE said that since the third quarter, with the adjustment of the demand side, the price of industry products has undergone a structural correction, and the overall prosperity of the industry throughout the year is relatively high compared with the previous year.
The performance of the cycle is very obvious. Judging from the performance forecast released by BOE A, BOE A achieved a net profit attributable to the mother of 20.015 billion yuan in the first three quarters of last year, an increase of 708.43% year-on-year, and the net profit attributable to the mother after deducting non-deduction was 18.598 billion yuan, an increase of nearly 20 times year-on-year. Among them, the net profit attributable to the mother in the third quarter was 7.253 billion yuan, that is to say, the net profit in the fourth quarter was about 6 billion yuan, which was lower than that in the third quarter.
In the view of most industry insiders, the cyclical challenges of LCD panels and the decline in stock prices are only temporary dilemmas faced by BOE, and what is more severe is that the LCD panels of its main layout may be replaced by OLED.
In the field of OLED panels, Korean panel manufacturers led by Samsung and LG still occupy an absolute dominant position. UBI Research data shows that in 2020, the global market share of OLED panels of Samsung and LG was 68.2% and 21%, respectively. Although BOE ranks third, its market share is only 5.7%, which is obviously different from the first two.
Folding screens into new opportunities?
Although the panel boom has declined, the panel market still has room for imagination in 2022, and the biggest source of imagination is the folding screen market that is gradually heating up. The market is entering the folding year, VIVO, OPPO, Huawei, Honor, Xiaomi, Samsung and other major head Android manufacturers have joined the folding screen camp.
From the production line to the sales end, BOE has made achievements in this field. BOE said that in terms of flexible OLED, the company's shipments have increased rapidly, and important breakthroughs have been made in business development, and the single-month shipments in December 2021 exceeded the tens of millions for the first time.
According to Sigmaintell data, in 2021, BOE flexible OLED smartphone panels shipped about 60 million pieces a year, an increase of nearly 60% year-on-year, and the shipment of flexible display screens ranked first in China and second in the world.
BOE has provided high-end flexible AMOLED products for many first-line brands.
Asus released its first 17.3-inch folding screen OLED laptop in early January, and BOE said that the AMOLED flexible screen used in the product was exclusively supplied by it. BOE said that the panel uses BOE's new generation of independent algorithm technology, which greatly improves the screen quality. By folding the laptop in the middle, two 12.5-inch, 1920×1280 displays can be created.
At the beginning of 2022, Honor released the first folding machine, its 7.91-inch AMOLED screen is also from BOE.
The market acceptance of folding screens is rising. Essence Securities believes that under the leadership of mobile phone brands such as Huawei and Samsung, folding screen mobile phones have gradually completed consumer cultivation and are expected to gradually open up the market.
In terms of market expectations, research institute Counterpoint said that the shipment of folding screen mobile phones will reach 17.2 million units from 2021 to 2022. CITIC Securities expects that the compound annual growth rate of folding screen mobile phone shipments will exceed 90% in 5 years, and it is expected to exceed 65 million units by 2025.
Can folding screens become a new opportunity in the display industry? Can BOE A stand out from the crowd? Nothing is yet conclusive.
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