The price of TV panels of all sizes rose in February, and it is expected that the price of LCD TV panels of all sizes will continue to rise in March.
The Zhitong Finance App learned that Guoxin Securities released a research report saying that the prices of 32, 43, 50, 55, and 65-inch LCD TV panels in February were 35, 60, 103, 126, and 171 US dollars/piece, up 2.9%, 1.7%, 1.0%, 1.6%, and 1.2% from the previous month. At the supply chain level, it has been observed that TV panel inventories are low. Production control strategies stimulate demand for TV panels to pick up and drive some demand ahead of schedule. TV panels are expected to start a new upward cycle. The bank believes that as LCD production expansion comes to an end, the industry will shift from being dominated by the supply side (changes in production capacity) to being dominated by the demand side (demand for large, high-end, and diversified terminals). The cyclical nature of the industry will fade, growth characteristics will show, and the profit stability of LCD panel companies is expected to gradually strengthen.
Guoxin Securities's views are as follows:
Price: The price of TV panels of all sizes rose in February, and it is expected that the price of LCD TV panels of all sizes will continue to rise in March
TV: In February 2024, 32, 43, 50, 55, 65-inch LCD TV panels were priced at $35, 60, 103, 126, 171 per piece, up 2.9%, 1.7%, 1.0%, 1.6%, 1.2% month-on-month; Omdia expects March 32, 43, 50, 55, 65-inch LCD TV panels to be $37, 62, 105, 128, 173 per piece, up 5.7%, 3.3%, 1.9%, 1.6%, 1.2% month-on-month. According to TrendForce, February was a low season for demand for TV panels, and the average operating rate of the industry fell below 60%. At the supply chain level, it has been observed that TV panel inventories are low. Production control strategies stimulate demand for TV panels to pick up and drive some demand ahead of schedule. TV panels are expected to start a new upward cycle.
Laptop: In February 2024, 10.1-inch (tablet), and 23.8-inch (monitor) LCD IT panels cost $17.1, 26.2, and 43.0 US dollars, changing -0.6%, 0.0% month-on-month; Omdia expects 10.1, 14, and 23.8-inch LCD IT panels to remain flat month-on-month in March.
Supply & demand: In December, the global large LCD panel shipping area decreased by 2.21% year on year, with Monitor and Notebook shipping area increasing year on year, and TV and tablet shipping area falling on the supply side. The bank expects the global large LCD production area to increase 2.48% in 2024 compared to 2023, of which 1Q24, 2Q24, 3Q24, and 4Q24 production capacity will increase by 0.72%, 0.35%, 0.26%, and 0.62%, respectively; the global large LCD production capacity is expected to increase by 0.72%, 0.35%, 0.26%, 0.62%, respectively; the global large-size LCD production area is expected to increase by 2.48% compared to 2023 In 2024, it grew 2.09%, with 1Q25, 2Q25, 3Q25, and 4Q25 production capacity increasing 0.62%, 0.61%, and 0.00%, respectively.
On the demand side, in December 2023, global large-size LCD panel shipping area fell 2.21% year on year. Among them, global LCD TV panel shipping area decreased 4.48% year on year, global LCD display panel shipping area increased 12.48% year on year, global laptop panel shipping area increased 5.66% year on year, and global tablet panel shipping area decreased 8.07% year on year.
The bank believes that as LCD production expansion comes to an end, the industry will shift from being supply-side dominated (changes in production capacity) in the past to being demand-side dominated (large, high-end, and diversified terminal demand). The industry cycle attributes will fade, growth attributes will become apparent, and the profit stability of LCD panel companies is expected to gradually strengthen.
Investment suggestions: LCD panel industry chain focuses on recommending BOE A, TCL Technology, etc.
The bank is optimistic that domestic panel leaders such as BOE A (000725.SZ) and TCL Technology (000100.SZ) will seize the dividends of the era of upgrading and localization of China's consumption, and gradually achieve a steady increase in profitability through the scale effect, cost advantage, and industry voice and pricing power brought about by the leading market share of the higher generation line. At the same time, as LCD prosperity gradually bottomed out and picked up, upstream raw material manufacturers such as Sanilipu (002876.SZ) are expected to gradually recover in performance. In addition, the bank continues to recommend Kangguan Technology (001308.SZ) and Shiyuan Co., Ltd. (002841.SZ), which are benefiting from the recovery in demand for smart interactive tablets.
Risk warning: risk of demand for display devices falling short of expectations; risk of price fluctuations of display devices; risk of supply of production equipment and raw materials.