Electronic enthusiasts eight o'clock: On the evening of August 1, the semi-annual report released by TCL Group (000100, SZ) showed that the operating income increased by 7.93% to 52.2 billion yuan in the same period; net profit increased by 110.8% to 1.66 billion yuan. The net profit of the returning mother increased by 70.7% to 1.03 billion yuan.
"Daily Economic News" reporter noted that the growth of TCL Group's net profit in the first half of the year, largely due to the continuation of the high prosperity of the LCD panel industry. As the panel continued to rise in the first half of 2017, Huaxing Optoelectronics' net profit increased significantly year-on-year.
However, as major panel makers aggressively expand production, the industry is beginning to worry about the risk of overcapacity.
Panel price increases boost performance
According to the reporter's understanding, since the sales of TCL Group exceeded 100 billion yuan in 2014, the annual sales revenue scale has been steadily increasing, the gross profit space has been narrowing, and the operating profit has continued to decline.
In order to improve operational efficiency, TCL Group's headquarters in the first half of 2017 reduced staff by 30%, and management expenses decreased by 34% year-on-year; the Group's overall industry reduced the number of employees by approximately 10,000, and the fixed expenses of existing businesses decreased by 3.87% year-on-year; %. During the reporting period, the Group's gross profit increased by 49.9% year-on-year.
The significant improvement in the performance of the TCL Group is largely due to the continuation of the high visibility of the LCD panel industry. It is understood that Huaxing Optoelectronics is a subsidiary of TCL Group, which is mainly engaged in the research and development, production and sales of display panels. The net assets account for a high proportion of the Group's net assets.
According to public information, in the first half of 2017, the t1 and t2 factories (mainly producing TV panels) continued to be fully sold and sold, with a total investment of 1.628 million glass substrates, an increase of 31.2%. The market share of TV panel products continues to increase, of which 55å‹ has the third largest market share in the world, and 32% in the market.
In addition, Huaxing Optoelectronics t3 factory (mainly producing high-end smart phones and mobile PC panels) has also been supplied to external customers on a small scale and continues to develop new customers. Production and development of comprehensive screen products are also underway, and mass production is expected in the fourth quarter.
In addition to the increase in production capacity, the substantial price increase of LCD panels is also an important reason for the substantial increase in profits of Huaxing Optoelectronics.
The semi-annual report said that in the first half of 2017, the LCD panel industry had a high degree of prosperity. Huaxing Optoelectronics achieved sales revenue of 13.54 billion yuan, a year-on-year increase of 49.2%, and realized profit before interest, taxes, depreciation and amortization of 5.48 billion yuan, a year-on-year increase of 149.7%.
According to the semi-annual report, Huaxing Optoelectronics is the biggest demand for financing in recent years, but subject to the restrictions imposed by the capital market regulatory rules, the plan to spin off the listing of Huaxing in the A-share market is blocked. TCL plans to use TCL Group as a financing platform for Huaxing, and gradually integrate its terminal products business into the platform of listed companies in Hong Kong stocks.
According to this plan, Huaxing Optoelectronics has completed the acquisition of Huaxian Optoelectronics in June.
On July 31, the group shareholders' meeting has already purchased the equity of Shenzhen Huaxing Optoelectronics through the group's issuance of shares to 85.71% of the plan, as the remaining equity is actually held by the state and Guangdong industrial funds in the form of preferred shares. The Group will actually hold 100% equity of Shenzhen Huaxing Optoelectronics.
Large-size panels are overcapacityIt is understood that from April 2016, the price of LCD panels began to rise. The price increase lasted until May 2017, lasting 14 months, which is the longest price increase in panel history.
Along with the price increase of the panel, major panel manufacturers also began to actively expand production, and the domestic 10.5 generation investment boom was high. In recent years, companies including BOE, Huaxing Optoelectronics and Hon Hai Group have successively invested in the construction of 10.5/11 generation LCD production lines. In addition, LG Display (LGD) plans to invest in 10.5 generation AMOLED or LCD production lines to produce ultra-large OLED or LCD panels.
Qu Zhiqin Li Yaqin analyzed the reporter of "Daily Economic News" that the domestic 10.5 generation investment boom is corresponding to the global TV market is ushered in a downward phase of demand for destocking. Based on the overall performance of the market in the first half of the year, the global TV panel market is expected to turn oversupply in the second half of the year. In the second half of the year, the global TV panel supply and demand ratio is 7% (5% is the supply and demand balance line), and panel prices are likely to fall.
The reporter also noticed that the price of large-size panels in June 2017 has begun to fall. Li Yaqin told reporters that "the price of small size is relatively stable, because the demand for mobile phones is still relatively stable. At present, the market for large-sized panels is now oversupply, and the price of large-sized panels will continue to decline in the future. To the fourth quarter."
For the price reduction of panel prices in the future, Li Dongsheng (microblogging), chairman of TCL Group, said in his semi-annual report that “the semiconductor display industry is an industry with large cyclical fluctuations and is currently in the high cycle of the industry. We have already had a low cycle. We are fully prepared to develop new technologies and high value-added products, and are building G11 large-screen production lines and G6 flexible AMOLED production lines to improve scale and efficiency through technology upgrades."
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