Recently, a number of panel companies announced the first quarter of 2018 earnings. Revenues, profit ratios, and even losses have become a major indicator of financial reports. This also means that panel companies may have a hard time this year, as they did in recent years.
Panel manufacturer's financial report "dimmed"
BOE Technology Group Co., Ltd. (hereinafter referred to as “BOEâ€) announced the first quarterly report of this year.
The revenue of BOE in the first quarter of this year was approximately 21.567 billion yuan, a decrease of 1.32% compared to 21.585 billion yuan in the same period of last year, and the net profit attributable to shareholders of listed companies was 2.019 billion yuan, a decrease from 2.413 billion in the same period of last year. The rate reached 16.34%. In 2017, BOE realized a net profit of RMB 7.568 billion, a year-on-year increase of 301.99%. Compared to this increase in net profit, the increase in net profit in the first quarter of 2018 was even worse.
South Korea’s LG Display released its first-quarter financial report showing that LG Display’s revenue for the first quarter was 5.7 trillion won (approximately US$5.3 billion), a decrease of 19.6% year-on-year. At the same time, the company’s first operating loss in six years was its The operating loss in the first quarter reached 98 billion won (approximately US$91 million). In contrast, the company's operating profit was 1 trillion won (approximately 930 million U.S. dollars) in the same period a year ago.
Taiwan's well-known panel maker AU Optronics announced its first-quarter earnings report for 2018 showing that in the first quarter, the company reported revenue of approximately 16 billion yuan, a year-on-year decrease of 15.9%, and net profit of approximately 920 million yuan, a decrease of 54.5% from the same period last year.
Innolux's first-quarter performance report in 2018 showed that Innolux's total revenue for the first quarter of 2018 was 14.4 billion yuan, a decrease of 22.4% over the same period of last year.
Panel prices continue to decline
A number of panel companies’ financial reports mentioned “influenced by the decline in panel prices†when analyzing the quarterly results.
According to data from the State Optics and Optics Research Center, global TV panel prices have entered the price inflection point since the second half of last year and have fallen for nine consecutive months. The demand has so far not recovered. The data shows that the prices of 32å‹-65å‹ TV panels have been falling by 3-10 US dollars, especially the 65å‹ large-size panel prices have dropped significantly since the third quarter of 2017. In March of this year, the average panel price dropped to 65å‹. 300-290 US dollars, is expected to fall to 280 US dollars in April.
The data from another well-known research institute, HIS, shows a much milder trend. In its previously announced TV panel price data in February, 32-inch panel prices fell by 1 US dollar, a rate of about 2%; 40-inch panel prices fell by 3 US dollars, a rate of about 3%; 43-inch panel prices fell by 4 US dollars, a rate of about For 4%; 49% of the panel price fell by 5 US dollars, a rate of about 4%; 55% panel price fell by 1 US dollar, a rate of about 1%. The 43-inch and 49-inch panels faced the greatest downward pressure on prices.
According to the latest data from Sigmaintell, from March to April, 32-inch panel prices fell by three US dollars in March and April, 39.5å‹-43% also dropped by 3-4 US dollars, and 43å‹ panel prices dropped by US$5; The price of 49å‹-50å‹ was reduced by 4-5 US dollars; 55å‹ was reduced by 3 US dollars; 65å‹ by 10 US dollars.
The capacity is increasing dramatically
According to the Innolux earnings report, in the first quarter of 2018, the company's large-size consolidated shipments amounted to 28.07 million units, a decrease of 8.1% compared to the 30.52 million units shipped in the fourth quarter of 2017; and the combined shipments of medium and small-sized units totaled 6857. 10,000 tablets, a decrease of 7% compared with 73.7 million shipments in the fourth quarter of 2017.
From a global perspective, global LCD panel shipments in the first quarter of 2018 fell by 10.5%. In accordance with established practice, the quarter is the low season for global stock preparation and the demand is weak.
At present, under the trend of continuous decline in panel prices, TV manufacturers have shown a cautious attitude and have not accumulated a large amount of inventory. The industry expects that in the second quarter of 2018, some panel prices will bottom out.
According to Liao Bingjie, vice president of China Star Optoelectronics, the share of global shipments above 65 inches is expected to be 13% by 2021. The average size of global TV shipments grows by about 1 inch per year, and the Chinese mainland market develops more rapidly. It is expected to reach 2021. The average size of mainland China in the year is 52.5 inches, and China is becoming the main supplier of large-size LCD panels.
It is reported that in 2018, the global production area of ​​LCD panels will increase by 10.5%. The increase in production capacity mainly comes from the G8.6 and G10.5 lines, which will also significantly increase the supply capacity of large-size panels such as 50-inch, 65-inch and 75-inch. For example, in our country, part of BOE’s rigid production line will usher in a rampage this year.
On the one hand, prices are lower. On one hand, the production capacity of LCD panels is still increasing at a large margin. Market demand is still to be observed. From this point of view, it is very likely that panel companies will not have the revenue and profit of last year.
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