Source: China Economic Network
On May 6, BOE disclosed an investor survey that said that the flexible AMOLED business is one of the main growth points of future performance, according to consulting agency data, in the first quarter of 2022, flexible AMOLED product shipments increased by nearly 50% year-on-year. The 2022 flexible AMOLED shipment target is more than 100 million units.
In the past period of time, BOE can be said to be moving towards the bottoming period of LCD panel prices, and the net profit attributable to the mother in Q1 2022 has declined, and the stock price has continued to fall. At this time, the layout progress of flexible AMOLED is announced, or a good medicine to enhance market confidence.
However, it is worth noting that in terms of OLED panel layout, BOE has not yet achieved profitability, and its LCD panel sales volume in 2021 is still more than 9 times the sales volume of AMOLED.
Since the second half of last year, LCD panel prices have gradually declined, as a result, BOE's attributable net profit growth rate began to slow down, the first quarter of this year began to decline, and the current LCD panel price has gradually approached the bottom, when to stop falling is unknown, which undoubtedly brings a lot of uncertainty to its performance.
Q1 attributable net profit fell by 16.57% year-on-year, and BOE fell into a period of bottoming out the price of LCD panels
According to the first quarter of 2022 financial report released by BOE a few days ago, the company achieved operating income of 50.476 billion yuan in the first quarter, an adjusted increase of 0.4% year-on-year; net profit attributable to the mother was 4.389 billion yuan, an adjusted year-on-year decrease of 16.57%.
This is the first time that BOE has ushered in a decline in net profit attributable to the mother after experiencing high performance growth in 2021. However, it is worth noting that the decline in attributable net profit is not without warning, and since the third quarter of 2021, the company's attributable net profit growth rate has begun to slow down.
The annual performance of BOE will also experience Waterloo this year, and a number of brokerage research reports show that after achieving a growth of more than 400% in the net profit attributable to the mother in 2021, BOE's net profit will decline in 2022, and its revenue will also face a single-digit percentage year-on-year increase.
It is worth noting that the forecast data of a number of brokerage research reports show that until 2024, BOE's performance will not return to the high growth trend of 2021.
With weak performance, its stock price also fell into a downturn. Since the beginning of 2021, BOE A stock price has undergone many roller coasters, and since September 2021, it has fallen one after another, even in the case of a sharp rise in 2021, BOE's stock price has not rebounded.
Although BOE spent more than 2.6 billion yuan to buy back A-share shares, it did not save the stock price from decline, and on April 29, BOE's stock price fell to a low point of 3.59 yuan / share, compared with 7.53 yuan / share on April 30, 2021.
Although BOE's financial report for the first quarter of 2022 did not explain the decline in net profit attributable to the mother, a number of industry insiders told reporters that this is inseparable from the downturn in the panel industry.
Looking back at 2021, the main domestic panel companies BOE and TCL Huaxing have achieved substantial growth in performance, with outstanding results, and the rise in LCD panel prices is an important factor in the performance of related panel companies.
However, the cyclical changes in the supply and demand relationship of LCD panels are also obvious. Entering 2022, as demand gradually slumps, LCD panel prices continue to fall. According to Omdia data, in February this year, the monthly revenue of global large-size LCD panels fell by 6.8% month-on-month and 6.18% year-on-year to $6.089 billion. Among them, the monthly revenue of BOE, Innolux and LG large-size LCD panels decreased by 16.83%, 14.10% and 5.51% respectively year-on-year.
In the first quarter of 2022, the net profit of most panel companies showed signs of year-on-year decline, of which the net profit attributable to TCL Technology and Rainbow Shares fell by 43.9% and 166.73% year-on-year, respectively, and the net profit of TCL Huaxing fell by 85.8% year-on-year, which shows that BOE, like most panel companies, is now falling into a period of bottoming out lcd panel prices.
Minsheng Securities said in the research report that the panel price from the second half of 2021 to the first quarter of this year has declined to varying degrees, the beginning of 2022 began to gradually narrow the decline, it is expected that the panel price has gradually approached the bottom, the price is expected to stabilize. Witsview data, in early April 2022, the latest price of 32/43/55 inch panels was $40/71/107, down 0%/0%/0.9% respectively compared with late March 2022, and the downward trend slowed down.
However, when the panel price reaches the bottom, when the price will rebound, no one can cover the conclusive conclusion, which undoubtedly brings a lot of uncertainty to the performance of panel companies such as BOE. A number of securities companies have given risk tips for the intensification of competition in the panel industry where BOE is located, the price of upstream raw materials has risen, and the downstream demand has not been as expected.
LCD sales are 9 times that of AMLED, and the OLED business is still not profitable
In fact, Jingdong has already responded to the performance crisis, such as investing in the BOE Chengdu car display base project and adding car displays to expand the application scenarios of LCD displays. Previously, BOE also laid out a variety of display technologies (such as Mini-LED backlight products).
BOE is even earlier in the AM-OLED display field layout, from 2011 began to invest in the construction of the 5th generation AM-OLED production line project.
According to the investor survey disclosed by BOE this time, in the past three years, the company's flexible AMOLED product shipments have maintained a substantial increase, and the sixth-generation flexible AMOLED production lines in Chengdu, Chongqing and Mianyang have the production capacity of folding screen flexible OLED.
According to the Research Report of Guolian Securities, in 2021, the output and sales volume of BOE AMOLED were 85.5/836,000 square meters, an increase of 59%/67% year-on-year, respectively, the production and sales rate was as high as 98%, and the single monthly shipment of flexible OLED panels in December 2021 exceeded the tens of millions for the first time.
Guolian Securities said that despite the shortage of parts and components, logistics and other aspects of the impact, BOE still maintained this year's flexible OLED screen shipment target of 100 million pieces, showing its confidence and competitive advantage in the development of OLED business.
BOE sees the flexible AMOLED business as one of the main growth points for future performance, but BOE's biggest source of profit is still LCD panels. From the 2021 financial report data, it can be seen that whether it is sales, production or inventory, BOE's LCD business is much higher than the AMOLED business, of which LCD sales are more than 9 times the sales volume of AMOLED.
On the other hand, although BOE's OLED business has been laid out for more than ten years, the OLED business has not yet declared profitability.
According to a report by CBN in April, Gao Wenbao, executive vice president of BOE and CEO of the display business, revealed at the performance exchange meeting that BOE now has three flexible OLED panel production lines in production, but the Chongqing flexible OLED production line is still in the initial process of product verification and climbing, and the current production capacity is at a reasonable level. OLED investment is very large, coupled with the market's strong demand for price, profitability is very difficult at present.
According to Qunzhi Consulting data, BOE OLED shipments in 21 years were about 60 million pieces, an increase of nearly 60% year-on-year. It can be said that the results are remarkable, but it is worth noting that most of the market share of the OLED market is still occupied by Samsung, and its leading position cannot be shaken in a short period of time. According to Omdia's forecast, China's share of the OLED market last year was only 15%, which will increase to 27% this year, and Samsung will drop from 77% to 65%.
In this case, the answer to whether BOE's flexible OLED business can turn a loss into a profit this year, become a new profit growth point, and fill the current situation of the LCD panel downturn is unknown. (Source: Blue Whale Finance)