The hottest performance of BOE turned around and s

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Behind BOE's performance Turnaround: step on the panel recovery

insiders believe that OLED is a revolution for LCD. There are some resources that can be shared between them, but it does not mean that there will be no problem in developing LCD only in the OLED era in the future.

the controversy about BOE has never stopped. Before, it was the problem of borrowing and loss, but now it is the problem of profit. This time, BOE made a profit without relying on the sale of assets

optimists believe that after years of investment and technology accumulation, BOE will usher in a turning point and have a bright future; Pessimists believe that BOE's current profits are just a flash in the pan and its future is dark

on the other hand, despite the controversy, BOE can still obtain up to 50billion credit lines from banks

in the 12 years since its listing, BOE has raised 975million yuan in IPO, and implemented additional issuance four times from 2006 to 2010, with a total of 49.979 billion yuan actually raised, while the cash dividend of BOE since its listing is only 66.5123 million yuan. The ratio of BOE's offering to dividends is 766:1

behind the profits

in April, 2013, BOE reported good news frequently

according to the 2012 annual report, the company achieved an operating revenue of 25.772 billion yuan, an increase of 102.27% over 2011; The net profit attributable to the shareholders of the listed company was 258million yuan. In the first quarter of 2013, BOE achieved an operating revenue of 8.059 billion yuan, an increase of 94.3% year-on-year; The net profit attributable to the shareholders of the listed company was 287million yuan, with a year-on-year increase of 158.01%, exceeding the profit of the whole year of 2012

this is in sharp contrast to previous years. From 2008 to 2011, BOE achieved net profits attributable to shareholders of listed companies of -808million, 50 million, -204million and 561million respectively, of which 561million was achieved in 2011 due to the transfer of BOE Energy Investment Development Co., Ltd. and the investment income of 3.6 billion yuan

why can an enterprise that was previously considered to have suffered five losses in six years achieve sustainable profits? The views of all parties are quite different

the main reason for the company to achieve profits is that from the perspective of the industry, there are some signs of panel recovery in the second half of 2012, mainly driven by the demand for TV, and the growth rate of intelligence and tablet is also relatively fast; From the perspective of the company, since the full production of Beijing generation 8.5 line, the overall scale has increased relatively rapidly, including the improvement of operation capacity, a relatively large decline in product costs, and the scale effect has emerged; The third is the adjustment of product structure. We have increased the proportion of products with relatively good profitability (mobile products such as, tablet computers and TV products) and reduced the proportion of some IT products with slightly poor profitability. With the combined effect of these factors, the company has achieved sustainable profitability. Liuhongfeng, a representative of BOE securities, told the financial weekly

Zhang Yu, vice president of BOE group, said that in addition to the reason that the increase in the scale of production lines has reduced the procurement cost, BOE has several project production lines such as generation 4.5, generation 5, generation 6 and generation 8.5, which can put suitable products on more suitable production lines. Let me give you an example. For the screen used for 10.1 inch tablet computers, if you use the 5th generation line to cut, the marginal utilization rate of glass substrate is only 80%, but if you use the 6th generation line to cut, it will reach 90%. In this way, the extra 10% benefit will come out, and the overall cutting of all production lines can be reasonably adjusted

in the view of Li Peng, an analyst at BOC International, continuous profitability is the result of the joint action of external and internal reasons

the external reason is mainly that the newly released capacity of the panel industry is relatively small, especially the high generation line. The internal reason is that the depreciation of several high generation lines of BOE in the past is coming to an end, and now its products can compete with the outside world. Therefore, some domestic TV manufacturers, including some orders from Samsung [Weibo], will transfer orders from Taiwan and South Korea, which is equivalent to the transfer of the purchase chain to the mainland, so the profit situation is relatively good

liubuchen, a senior person in the household appliance industry, believes that the fundamental reason for BOE's profitability is that South Korea, Japan and Taiwan, China have developed OLED, leaving a little space for BOE and other enterprises for the time being

many years ago, the LCD panel and led of global household appliances were in a situation of oversupply on the whole. Why did the supply fail after 2012? Why did most of the panels purchased by Chinese enterprises in the past come from Taiwan, China, South Korea and Japan? Now even some South Korean and Japanese enterprises have begun to purchase panels from China? This is because, especially the panel enterprises, mainly in South Korea, supplemented by Japan and Taiwan, China, have now reduced their panel production capacity. Why cut it? Because they turn these capacities into OLEDs. Therefore, there is a global shortage of LED panels. In the case of insufficient supply, international giants, including Chinese machine manufacturers, began to purchase panels from China. As a result, the panel sales of enterprises including BOE and csot increased, and the profits increased

Liu buchen also pointed out that in addition to the increase in purchase orders, another reason for achieving profits is that the import tariff on panels has increased from 3% to 5% since last May, resulting in the increase in the purchase cost of color TV enterprises. Therefore, they are not willing to purchase abroad, and some of them have to be transferred to China

the profitability of China's color TV enterprises is relatively poor, so no matter how small the impact will be amplified. If the profit margin is high, it doesn't matter whether it rises or falls a little. But originally, the profit margin of color TV is relatively low. If the tariff rises a little, color TV enterprises will care more when buying panels

so there is a very interesting phenomenon, which can explain why BOE has been losing money for so many years, but now it is making money? Liu buchen said

in addition, the weekly financial management report noted that by December 13, 2013, BOE had lifted the ban on 594million shares, and the listed shares were allocated by private placement institutions, accounting for 4.60% of the outstanding amount and 4.39% of the total share capital. From another perspective, it is also necessary for BOE to maintain a profitable State

debate on technology upgrading

at present, BOE has built and successfully operated the Chengdu generation 4.5 line, Beijing generation 5 line, Hefei generation 6 line and Beijing generation 8.5 line of thin film transistor liquid crystal display devices (TFT-LCD). These lines are considered to be an important support for BOE's operating revenue and profit growth in 2012. For future development, BOE's choice is to continue to increase the size of TFT-LCD

on August 14, 2012, BOE announced that the company signed a framework agreement with Hefei Municipal People's government and Chaohu Urban Construction Investment Co., Ltd. to invest 28.5 billion yuan to build a tft-lcd8.5 generation line in Hefei, Anhui Province to produce TFT-LCD displays and modules of 55 and below

then, on December 24, 2012, it was announced that the two sides signed a cooperation and investment agreement with the Chongqing municipal government, and the two sides planned to invest 32.8 billion in Chongqing to build and produce and operate the 8th.5 generation new semiconductor display device production line. The production line adopts oxidetft technology, including the new semiconductor display device with 90000 glass substrates per month and the touch screen production line with 30000 glass substrates per month Build LCD TV production line (with a design capacity of 2million sets/year)

although some people in the industry have long pointed out that the future of LCD panels is the era of OLED, and it is unwise for BOE to invest heavily in TFT, BOE has its own ideas

Zhang Yu, vice president of BOE, told the financial weekly: at present, only Samsung and LG in South Korea are doing part of OLED. Samsung already has an AMOLED production line. If it is large, it is said that Samsung and LG are launching 55 inch products, which have not been launched at all so far

liuhongfeng, a representative of BOE securities, believes that first of all, it is necessary to understand that OLED and TFT-LCD are not substitutes, but inheritance and development, simply an upgrading process

it's not that LCD will become a pile of scrap iron as soon as OLED comes out in the future. At present, 70% of OLED's core process equipment is connected with LCD. Their core technologies are the same, including backplane and photochromic technology. At present, BOE's LCD production line can be converted into OLED through some transformation and equipment addition

in Liu Hongfeng's eyes, OLED will not replace LCD immediately. At present, OLED technology actually has some bottlenecks, such as high cost and short service life. Moreover, in the current global flat panel display industry scale of about $120billion, more than 90% is LCD, while AMOLED is less than 10 billion, which makes it produce initial friction on the clamping surface. It is estimated that by 2016, it will increase to US $15.6 billion, accounting for 10% of the global scale of flat panel displays. Therefore, the relationship between OLED and LCD is not an instant replacement. It will not become the mainstream for at least ten years, and coexistence is possible

amoled gives people the most intuitive feeling that it is thinner, but today's TVs are already very thin. Even if OLED can reach one centimeter, it is indeed thinner, but are consumers willing to spend 20% - 30% more money to buy or change one? If its price is the same as that of TFT, you may buy it. Liu Hongfeng said

however, in Liu buchen's view, OLED replaces LCD, just as LCD replaces CRT, it is not completely replaced, and there is also a certain undertaking relationship between them. Of course, the undertaking relationship or coincidence degree between LCD and OLED may be higher, but it definitely does not mean that they are the same product

he pointed out that OLED is a revolution for LCD. There may be some resources that can be shared between them, which definitely does not mean that there will be no problem in developing LCD in the OLED era in the future. Otherwise, it is impossible to explain why Samsung has suspended part of its LCD production line in recent years to carry out OLED transformation

if Samsung believes that OLED and LCD are the same, there is no need to transform the LCD production line and reduce the LCD production capacity

Liu buchen expressed a different point of view: when any new product or technology appears, there is a growth period, and it is impossible to do it very much at once, but the key is that if you want to use this as an excuse to say that it has not been done, so I will not do it. Then, when others do it, there will be no chance for you. Think about ten years ago, when LCD was not very big. At that time, Chinese enterprises used this as an excuse to continue to do CRT. As a result, if people become bigger, you will have no chance. Now Chinese enterprises have a very wrong view that OLED technology is not mature, and the scale and market have not been developed, so there is no need to do it. For example, if you don't plant trees, will you have a chance to pick peaches

for BOE's continued launch of the TFT-LCD project, Liu buchen said: This is a question of whether the enterprise has vision. It is similar to that LCD will grow up ten years ago, and some people invest in the construction of CRT tube factories, which eventually become scrap metal. Moreover, BOE is not an enterprise that acts according to the market rules. Researchers are enterprises that integrate high concentration ceramic material particles evenly into fibers. As a listed company for so many years

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