LCD Panel Pattern Restructure To Accelerate The Production Of China Panda Panda Panel Production Line?

In the evening of April 14th, East China Science and Technology issued several announcements, one of which was the implementation of the "delisting risk warning" from April 16, 2020. The stock was changed from "Huadong science and technology" to "*ST East branch". The reason is that Huadong science and technology lost 2018 consecutive years in 2019.

According to the latest earnings report, East China Science and technology in 2019 attributable to shareholders of listed companies net profit loss of 5 billion 641 million yuan, a loss of 987 million yuan in 2018.

East China Science and technology said that the LCD panel industry in 2019 showed imbalance in production and demand, and some products sold at a maximum price drop of 30%. In the first quarter of this year, East China technology continued to lose money in the first quarter of this year, with a net loss of 450 million yuan -5 Q1.

This is the current downturn in the LCD panel industry, and the epidemic has further accelerated the shuffling of LCD panels. In recent years, the industry has also frequently heard that the panda's panel will be sold and reorganized in East China's science and technology. In twenty-first Century, the business reporter learned from the industry chain that potential bidders include BOE, TCL technology, Shenzhen Tianma and hueco. No final conclusion has been reached yet, and the buyers are still investigating, and there is no definite reply.

In addition to CLP panda, a number of senior panel makers told the economic news reporters twenty-first Century that Samsung's LCD panel factory in Suzhou is also seeking sale, and Samsung has planned to withdraw from the LCD market. It is not hard to see that in 2020, the global LCD panel market will usher in a pattern transformation, and Chinese enterprises will gain more voice. Liu Jiansheng, senior analyst of TV panel research at Sigmaintell, told reporters: "this year, the Korean panel factory will speed up the production of LCD, which will have a greater impact on the panel pattern. In 2020, China's panel makers will account for more than 50% of the capacity of the TV panel."

Multi channel bidding for CLP Panda

      Huadong science and technology company has two major LCD panels, one is the 8.5 generation line of Nanjing China electricity panda, which belongs to the East China Science and technology subsidiary, Nanjing CLP panda tablet company. The company was founded in 2012. In 2013, it started investing in building LCD panel projects, with a total investment of about 28 billion 900 million yuan. The other one is the 8.6 generation line of Chengdu, which belongs to Chengdu China Electric panda company. Chengdu has invested 28 billion yuan in cooperation. In addition, Huadong technology also acts as a 6 generation line for Nanjing. It belongs to Nanjing panda panda liquid crystal company.

The sale of CLP panda panel production line is gradually increasing, but there are many opinions about the way of sale, such as selling the 8.5 generation line of Nanjing alone, or selling the 8.5 generation line of Nanjing and the 8.6 generation line of Chengdu, or the 6 generation line of Nanjing. Another conjecture is whether the 8.6 generation line of rainbow Xianyang will also be sold, because the East China technology and rainbow shares are all listed companies of China Electronics (CEC), so whether the four lines go and whether they all have the intention to sell, all of which have triggered speculation in the industry.

Although Samsung Dispaly's mainland China liquid crystal production line is also seeking sale, the industry obviously pays more attention to China Electric panda. Its importance lies in IGZO technology. IGZO (Indium Gallium Zinc Oxide) indium gallium zinc oxide is a thin film transistor technology, belonging to metal oxide panel technology. It has the characteristics of high resolution, high refresh rate, high brightness and low energy consumption, and is the core technology of panda. A senior panel analyst told reporters that IGZO panel technology is the essential technology of large size OLED, and no matter BOE or TCL technology has not overcome this problem, they will strive for this opportunity to speed up the OLED research and development process, and OLED is an important direction of future display technology.

It is understood that in addition to BOE and TCL, China's deep Tianma and Hui Ke also have the intention to participate in bidding. In terms of volume, BOE currently has a total market capitalization of 136 billion 600 million yuan, TCL technology total market capitalization of 59 billion 900 million yuan, and Shenzhen Tianma as 27 billion 600 million yuan. According to the ranking in 2019, QQ consulting global TV LCD panel shipments data show that BOE ranked first, TCL Technology ranked fourth, and Hui Ke seventh. In a word, BOE and TCL technology are two of the most competitive.

At present, BOE has 4 8.5 generation lines, 2 10.5 generation lines, TCL technology has 2 8.5 generation lines, 2 11 generation lines, Hui Ke has 2 11 generation lines, 1 8.5+ generation lines, and 1 lines of suspect lines. For the small size deep Tianma, the large size is complementary, but there is a lot of pressure on the production line.

At the moment it is difficult to determine the final acquisition trend. Li Yaqin, general manager of QQ consulting, told the twenty-first Century economic analysis reporter: "the factors that affect M & A will be very complicated, because the domestic panel production lines are three party investment, including local governments, enterprises, investment funds and so on. Once a transaction is made, it will involve at least a few changes in the funds, so it will be more complicated. In particular, the attitude of the local government in the location of the panel production line, as well as some negotiation conditions in the transaction process. It also includes the buyer's position on the production line, technical customer resources, product complementarity, and of course price.

LCD panel pattern reshaping

There is no doubt that the LCD industry will usher in a new round of qualifying. In 2019, according to QQ consulting data, the top five shipments and shipping area of the LCD panel were BOE, Qun, LGD, TCL Huaxing and Samsung. The CEC PANDA, the 8.5 generation line and the 8.6 generation line account for 4.9% of the total annual shipment volume and 5.6% of the shipment area.

As Samsung, LGD and CLP panda's LCD factory's outcome is not clear, the industry rankings have great uncertainty. "If we look at the size of the shipment area of the large-size LCD panels, after the adjustment of Han factory this year, the number one is BOE, ranking second is group creation, third is friends, and fourth is TCL Huaxing," Li Yaqin analyzed. "If we pull the time to two years later, that is, after the Korean plant has completely withdrawn, by 2022, the capacity of BOE (BOE) will still be slightly larger. The increase is about 23%-24% in the world. If we do not consider the undetermined factors of CEC acquisition, BOE is still in the first place.

But what is certain is that the role of Chinese mainland enterprises in the large-size LCD market is becoming more and more important. Liu Jiansheng said: "by the year 2018, the world is still dominated by the Korean panel factory. By 2019, the TV panel production capacity of the mainland's panel factories has exceeded 40%. At the end of this year, LGD and Samsung show that after completely withdraw from the LCD market, the capacity of TV panels in the future mainland China will account for more than 60% and occupy an absolute leading position.

In the history of LCD panels, after many industrial integration and counter cyclical investment, in the process, there are always some enterprises and regions exit strategically in the shuffle, and the newcomer wins more shares. After years of tackling tough problems, China has already ranked among the top in the LCD panel. And once the liquid crystal hegemony Korea chose to lose TV liquid crystal loss burden, to the large size OLED (LGD LED), QD-OLED (Samsung LED) direction to seek high-end transformation.

At the same time, the industry also has some doubts, such as liquid crystal will soon be eliminated? How to solve the problem of excess capacity after the acquisition? First of all, many panel analysts told reporters that the acquisition of LCD panel factory can not be equivalent to the acquisition of backward production capacity. The product line to be sold is relatively mature, customers are stable, the equipment is relatively new, and needs to be analyzed from the manufacturer's needs. In terms of production capacity, the Korean factory withdrew from the epidemic and reduced the terminal demand. But by the year after tomorrow, the supply and demand of the whole market were stable, and the overall capacity of large size LCD was not very large.

However, the panel makers should also pay attention to risks. Li Yaqin told reporters: "the internal integration of panel enterprises or the production of external liquid crystal are mainly based on their own business strategy, and the core is to improve competitiveness, which is understandable. However, China's mainland panel factory needs a sense of crisis. China's mainland panel capacity share has shown obvious advantages, and the biggest advantages of LCD include large capacity, complete industrial chain and low cost. In fact, QD-OLED, OLED, Micro-LED and other technologies can not be realized in the short term, so it will not replace LCD as quickly as possible. But these technologies are positioned in the high-end market, and the high-end market is very important and worthy of attention, because it represents the future technology trend, representing profits and representing the direction of consumer demand. Therefore, the scale is one aspect. In the long run, structural optimization and high profitability can go a long way.