According to reports from various research institutes, panel prices began to rise strongly in March, and this situation is expected to continue until April to May.
The Zhitong Finance App learned that recently Sharp is considering shutting down its 10th factory in Sakai City. If shut down, large-scale production capacity will be reduced by about 3%. Furthermore, rumors continue about the acquisition of LG's Guangzhou factory by a domestic panel manufacturer. Some people in the industry chain said that major companies such as BOE A and TCL Technology are all interested in acquiring it. Currently, LG's Guangzhou factory accounts for about 4% of the world's large-scale production capacity. Under the catalyst of the above two events, domestic LCD panel manufacturers have further strengthened their voice, which may catalyze a further increase in LCD panel prices. Related concept stocks: Dongfang Precision Electronics (00710), Xinli International (00732), TCL Electronics (01070), Yidu (International Holdings) (00259).
Furthermore, based on reports from various research institutes, panel prices began to rise strongly in March, and it is expected that this state of affairs will continue until April to May.
According to TrendForce Jibang Consulting's research data, TV and display panel prices all rose in late March. Among them, TV brands increased their panel procurement efforts in March, driving a 7% quarterly increase in first-quarter purchases, and the operating rate of panel manufacturers rebounded to more than 80%. It is anticipated that in the second quarter, panel factories will produce as needed, driven by sporting events, new product stocking, and 618 promotions, which will help TV panel prices continue to rise.
WitDisplay's attitude is even more pronounced. The agency said that due to the combination of four factors: polarizer supply barriers, panel factory maintenance, good terminal market performance, sports marketing expectations, and panel manufacturer business strategies, panel prices completed a full range of hard landing, stabilization, and strong rebound in the first quarter. In April, all sizes will maintain their March gains without any doubt. This round of price increases will continue until at least May, and all sizes will reach their previous highs one after another. After June, we need to observe the market performance of China's 618 promotion.
Omdia expects the price of panels of the same size to rise by 5.4%, 3.2%, 2.8%, 3.1%, and 2.3% in April, respectively.
Previously, major panel manufacturers rushed to start from the supply side and strictly control capacity utilization to improve the supply and demand relationship in the industry, but now they are finally seeing the dawn of price increases. Based on this round of price increases, panel demand is also expected to usher in a turning point. In anticipation of the peak stocking season in the second quarter, LCD panels will be the first to benefit.
It is worth mentioning that A-share LCD panel leader TCL Technology closed on April 1. In an institutional research announcement released on March 26, TCL Technology stated that in 2023, the company will firmly promote the high-end OLED business strategy to avoid homogenized competition; rely on technical advantages to boost the high-end market, achieve mass production of LTPO products, and cooperate with many leading domestic and foreign brands to launch a variety of flagship products such as folding screens, full screens, and curved screens. The proportion of high-end products increased significantly. At the same time, benefiting from the increase in downstream demand, the company's OLED product shipments have increased dramatically, and the operating efficiency of the OLED business has improved under the joint catalysts of volume and price. In addition, medium size is a key strategy promoted by TCL Technology. The company's T9 production line climbs production capacity according to the plan, and high-end IT products will be fully launched in 2023, and brand customers will be fully introduced.
According to data from Guoxin Securities, the price of TV panels of various sizes will accelerate in March. The agency also predicts that the price of LCD TV panels of all sizes will continue to rise in April, and said 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), and the industry cycle attributes will fade, and the profit stability of LCD panel companies is expected to gradually strengthen.
Chen Jun, executive deputy general manager and chief analyst at Qunzhi Consulting, said that the penetration of OLED in tablets, laptops, etc. is expected to accelerate in 2024, and the penetration rate of OLED in mobile phones will reach about 43% to 45% in 2024. The focus of OLED panel manufacturers will shift from changes in penetration rate to the pursuit of profit. According to information, currently the OLED production lines of major panel manufacturers are not profitable, and 2024 may become a turning point.
According to a research report released by CITIC Securities, OLED display technology has outstanding advantages such as display effects, thinness, and power consumption, and has become an important display upgrade direction. It is expected that it will continue to penetrate the smartphone market and accelerate expansion in medium size scenarios such as tablets/laptops/vehicles, driving the industry market to continue to grow steadily. In the OLED panel sector, we are optimistic that supply and demand will improve the momentum of continuing price increases for lower panels in the short to medium term. In the long run, the industry space is expected to expand steadily as terminal applications continue to penetrate. The upstream sector, in terms of OLED equipment, is optimistic about the development opportunities of domestic manufacturers driven by a new round of production expansion cycle and domestic substitution; in terms of OLED materials, demand for terminals continues to expand, and panel manufacturers are actively promoting supply chain localization under profit pressure, and domestic material manufacturers are expected to fully benefit.
Related concept stocks:
Dongfang Precision Electronics (00710): BOE Precision Electronics Co., Ltd.'s core business is mainly automotive displays and industrial displays. BoeVX is BOE's sole sales platform for the automotive display business.
Xinli International (00732): High quality LCD displays and components are one of the company's main businesses.
TCL Electronics (01070): TCL Electronics Holdings Co., Ltd. is a Chinese holding company mainly engaged in the manufacture and sale of display devices.
Yidu (International Holdings) (00259): The company is a Hong Kong investment holding company mainly engaged in the manufacture and sale of LCD displays and related products.