Image source @ Visual China
Wen | zinc scale, author | Chen Dengxin, editor| Meng Huiyuan
The bench of the "boss" of the BOE TV panel has not yet sat hot, and there are variables.
Over the years, BOE has continued to grow, from a runner on the panel track to a heavyweight player that cannot be ignored, and the panel shipping area and panel shipment quantity are the first in the world, making Japanese and Korean panel companies feel like needle felts.
Climbing to the top has become the keyword of BOE.
However, the opponents did not sit still, and in the field of TV panels, they temporarily won back a round: in 2021, JD.com was the leader for 9 months and was overtaken by LG.
So, is BOE "carelessly losing Jingzhou", or is it really helpless? The two-front battle of BOE, where is the winner and loser? BOE is undervalued in the capital market, is it impossible to escape the fate of the cycle?
Behind it is the dispute between LCD and OLED routes
Samsung and LG are both South Korea's technology giants.
Over the years, Samsung has been the world's largest TV manufacturer and LG is the world's largest TV panel manufacturer, becoming the two major focuses that the market cannot avoid.
Until the rise of China's local TV brands, to the center of the stage, with a voice that can not be ignored, Japanese and Korean brands slowly fell behind in this game, and subtle changes occurred.
In the first three quarters of 2021, BOE, standing behind China's local TV brands, took advantage of the opportunity to stage a corner overtaking in the segment of TV panels, and LG gave up the top spot of TV panels.
In this context, the outside world has more expectations for BOE.
Unfortunately, BOE has not yet gained a foothold, LG has killed back, returning to the position it has held for a long time, and BOE has to relegate to second.
According to the data of the British market research company Omdia, in the fourth quarter of 2021, BOE's TV panel market share was 20.6%, while LG was 23.8%, ending three consecutive quarters of "hegemony".
BOE was overtaken by LG
"LG regained the lead, mainly due to the surge in OLED product sales, with OLED TV panel sales reaching 2.3 million in the fourth quarter, exceeding 2 million for the first time in a single quarter." Omdia's report says so.
In other words, the reason why LG has fought a turnaround battle depends on the OLED TV panel volume, and this is where BOE's current weakness lies.
After all, boe's background color is LCD.
Low-cost superimposed latecomer advantage, BOE, Huaxing Optoelectronics in the LCD track all the way to the high, playing Samsung, LG defeated, so the idea of de-LCD.
After this, LG gradually tilted resources towards OLED.
A private equity source told Zinc Scale: "The dispute between BOE and LG is, in the final analysis, the dispute between THE ROUTE of LCD and OLED, the controversy around these two routes has been a long time, but the general consensus is that it will coexist for a long time, but LCD is the stock market, OLED is the incremental market, which is better or worse at a glance." Looking at it now, LG's previous fall behind may be temporary, and as the growth momentum of OLED continues, IT may be difficult for BOE to 'counter-kill'. ”
In short, the reason why BOE has been the "boss" of the TV panel for 9 months is just to catch the "green and yellow" of LG switching from the LCD route to OLED.
According to public information, LG's OLED TV panel sales in 2021 were 7.4 million pieces, an increase of 65% year-on-year, based on which the relevant agencies predict that LG's global market share in 2022 will be 23.9%, while BOE will be 21%.
BOE bets on both ends
In fact, BOE takes a defensive position on the TV panel and an offensive position on the mobile phone panel, so although LG is a fierce enemy, Samsung is the biggest problem.
According to Strategy Analytics data, the global smartphone display panel market reached $46 billion in 2021, an increase of more than 5% year-on-year; of which Samsung, BOE and LG accounted for 49%, 16% and 8% of the revenue share, respectively.
BOE is eager to benchmark Samsung
This means that BOE has a lot of room to rise.
More critically, BOE's layout in the OLED track is flexible OLED, focusing on mobile terminals such as mobile phones, tablets, and laptops.
Among them, the mobile phone panel is its main direction of attack, once allied with Huawei to attack the city, after Huawei was blocked, it set its sights on Apple, eager to break through with the help of apple chain.
According to public information, BOE has transformed its B7, B12, B11 factories, specifically for apple production OLED flexible screens, in 2021 supply more than 15 million pieces, accounting for 10% of the total number of screens required by Apple; in 2022 may supply up to 50 million pieces, and Samsung needle tip to Mai Mang.
After Apple's blessing, BOE's OLED is back on track.
According to official sources, monthly sales exceeded 10 million units in December 2021, while according to Stone Partners data, OLED shipments in the first quarter of 2022 were 20.2 million, up 74% from 11.6 million in the same period in 2021.
It should be noted that entering the apple chain does not mean that drought and floods ensure income, and many enterprises have become apples and fail apples, after all, the right to speak in the industrial chain is in the hands of apples, and it is left to its arbitrary discretion.
For example, OFILM and Sunwohnah were abandoned by Apple, the former is still in a slump, and the latter was once on the verge of death, and only came out of the predicament after the transformation.
That is to say, with the deep binding with the apple chain, BOE's hidden worries will also increase.
In this regard, BOE also knows it, adding code on the folding screen, calculating not to put the eggs in a basket.
According to the "China Folding Screen Smart Machine Market Development Trend" report, consumers' attitudes toward folding mobile phones have gradually changed from "early adopters" to "common use", which has also prompted mobile phone manufacturers to continuously expand their territory in the folding screen market, improve market supply, and seize high-end market share.
In short, the Android camp is eager to seize the strategic opportunity of the second half of the mobile phone consumption iteration, so as to compete with Apple, while BOE can profit at both ends.
According to GfK Sainuo's data, domestic foldable mobile phone OLED panel sales are expected to jump from 2.02 billion yuan in 2021 to 14.85 billion yuan in 2025.
However, it remains to be seen whether the folding screen can rise and whether BOE can narrow the gap with Samsung.
Can't escape the fate of the cycle?
TV panel and LG fight, mobile phone panel and Samsung fight, two-line combat BOE has always been the focus of the capital market.
On March 30, 2022, BOE disclosed its 2021 annual report, the company achieved operating income of 219.3 billion yuan for the whole year, an increase of 61.79% year-on-year; net profit of 25.83 billion yuan, an increase of 412.96% year-on-year; and the number of shareholders was 1.646 million, an increase of 62.65% year-on-year.
Net profit soared
From the performance point of view, operating income and net profit have both hit a record high.
Coupled with the gathering of fans, how to see the capital market "darling" posture, but the fact is showing a trend of defeat and retreat, the contrast is visible to the naked eye.
Looking back, since May 2021, BOE's stock price has fallen all the way, almost no resistance, even a beautiful annual report is of no help to the stock price, as of March 31, 2022, the decline is as high as 43.67%; if the time is extended, BOE's stock price is the result of listing that is, the peak.
Among them, in order to save the decline, BOE invested 2.62 billion yuan to repurchase, and repurchased 1.3% of the shares, which did not stir up much waves.
The reason for this has a lot to do with its inability to escape the fate of the cycle.
Panel is a technology-intensive and capital-intensive overlap industry, the need for continuous technical upgrading iteration and continuous investment in the construction of new panel production lines, so that the fluctuation of production capacity superimposed supply and demand changes have spawned peaks, peaks, thus making the performance of related enterprises fluctuate.
In this regard, BOE threw out the view of "weakening the panel cycle", but it was not recognized by the capital market.
In fact, since the second quarter of 2021, LCD panels have gone downhill, when to regain the momentum is still unknown, and with the large-scale production of OLED, price cuts are inevitable.
After all, Wang Dongsheng, former chairman of BOE, once said bluntly: "The price of standard products drops by 50% every three years, so the technical ownership of products must double every three years." ”
In a word, it is difficult to shake the cycle.
An industry insider told Zinc Scale: "The biggest problem with BOE at present is that the 'moat' is not wide enough, can not rely on the existing heavy assets 'lying flat', can only continue to participate in the technical 'inner volume', may have the current deterministic product line, the future overnight may be abolished, CRT is the best evidence." ”
All in all, the struggle between BOE and LG and Samsung will continue, and who will dominate the ups and downs in the future has not yet been determined, and the only thing that can be determined is that the rise of Chinese local brands downstream of the panel is unstoppable.
Then, the road ahead of BOE, there is still fog.