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BOE'S Nearly 20 Billion Fixed Increase Outlines The Blueprint For The Next Decade

2021/6/23 12:21:00 0

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          On the evening of June 21, BOE a (000725. SZ) announced that the CSRC had examined the company's application for non-public issuance of a shares on that day, and the result was that it was approved.

This is a non-public offering launched by BOE after eight years. In this fixed increase, the number of shares issued by BOE does not exceed 20% of the total share capital before the issuance, that is, 6.96 billion shares. The net amount of raised funds is expected to be no more than 19.87 billion yuan, which is used to "purchase 24.06% equity of Wuhan BOE optoelectronics", "Capital increase and construction of BOE Chongqing sixth generation AMOLED (flexible) production line project of BOE Chongqing", "capital increase and construction of 12 inch silicon-based OLED project of Yunnan chuangshijie optoelectronics", "capital increase and construction of Chengdu BOE hospital project" and "repayment of loan of Fuzhou Chengtou group".

The approval of this audit means that the nearly 20 billion fixed increase is basically completed.

Since the announcement at the beginning of the year, BOE, the largest fixed increase in the electronic industry this year, has attracted the attention of many investors, and once led to substantial fluctuations in the stock price, with mixed reviews and criticisms in the market. Nearly half a year has passed. Judging from the market performance after the scheme is passed, the investor sentiment is relatively optimistic. At the end of June 22, BOE shares rose 1.93% to 634 yuan, with a turnover of 5.2 billion yuan and a market value of 220.6 billion yuan.

Since the second half of last year, thanks to the rise of LCD panel prices and the gradual withdrawal of Korean enterprises from the LCD market, the production capacity gradually transferred to China, and the performance of major domestic display panel enterprises has increased greatly. Interestingly, under this background, BOE and TCL technology, two leading Panel Companies in China, have successively launched a large amount of fixed increase, which can be seen from the industry prosperity and the undercurrent behind it.

More importantly, from this fund-raising project of BOE, we may see the future direction of the industry.

Consolidate the leading position of LCD

In short, BOE's fixed increase project involves LCD production line, AMOLED production line, OLED micro display and smart medical industry sector.

The above direction can basically outline the power point of BOE in the next few years.

The first is to acquire the equity of Wuhan BOE optoelectronics. The company mainly produces 32 inch and above large-size display screen products, and its revenue mainly comes from its construction and operation of the 10th.5th generation TFT-LCD (reporter's note: commonly referred to as LCD) production line. The production line will achieve mass production at the end of December 2019, and is expected to achieve full production in 2021. After the acquisition, the company's shareholding ratio of Wuhan BOE will be increased from 23.08% to 47.14%.

Xia Qingying, an analyst of Wanlian securities electronics industry, pointed out that "the semiconductor display industry belongs to a cyclical industry. In 2019, the supply of the panel industry exceeded the demand, and the product price dropped, resulting in the company's panel business profit level falling to a certain extent. However, with the large-scale withdrawal of overseas production capacity and the increase in demand for large-size panels, the price of display panel products has gradually increased, and the industry has begun to show a warming trend. Through this non-public offering, the company will further enhance its control over the production line and enjoy the industry development dividend of upward panel price. "

The 21st century economic report reporter noted that from 2017 to 2020, Wuhan BOE optoelectronics had been in a state of continuous loss, but with the yield reaching the standard and reaching the full production state, the company's current efficiency has been comprehensively improved. In the first quarter of 2021, Wuhan BOE optoelectronics achieved a revenue of 2.9 billion yuan and a net profit of 360 million yuan. The amount of profit in a single quarter has exceeded the total accumulated losses of the previous four years.

From the perspective of technology evolution, despite the popularity of OLED in recent years, Korean enterprises have gradually withdrawn from the LCD market, but many insiders believe that the LCD market is still promising.

Liu Xiaodong, President of BOE, said at the world display industry conference recently attended by 21st century economic reporter, "many people used to say that LCD is out of date. Some people say OLED and micro LED will promote it. However, it will take at least 20 to 30 years for these new technologies to be commercialized. Therefore, it can be predicted at least in the next decade that LCD and OLED will be the main players in the display market, occupying an absolute market share. "

BOE also wrote in response to the feedback from the CSRC that AMOLED technology has a longer R & D period and growth period than TFT-LCD technology, and its yield improvement and cost reduction are much more difficult than TFT-LCD technology. This is also the reason why AMOLED technology is mainly used in the application field of small and medium-sized high-end intelligent mobile display terminals. Therefore, TFT-LCD technology will still occupy the main market space of semiconductor display industry for a long time. According to omdia's prediction, TFT-LCD will still maintain 88.10% of the shipping area share and 62.28% of the revenue share by 2028.

Layout AR / VR market in advance

On the one hand, it is to consolidate the leading position of LCD. On the other hand, BOE is also accelerating the layout of AMOLED, which is the inheritance and development of this technology. One of the actions is to increase the capital of Chongqing BOE and build the sixth generation AMOLED (flexible) production line project of BOE in Chongqing.

BOE said that the company's main products are TFT-LCD and AMOLED. Due to the inheritance of the two technical routes in terms of process technology and universality of equipment, AMOLED technology development and breakthrough are likely to be realized by the leading enterprises in the TFT-LCD industry.

The application fields of the above two types of products are different. AMOLED products are mainly used in mobile phone field, and TFT-LCD is mainly used in LCD TV field. In the field of mobile phone application, AMOLED products and TFT-LCD products have certain customer groups overlapping, but AMOLED products are mainly used in high-end mobile phone products, TFT-LCD products are mainly used in low-end mobile phone products.

At present, the main customer groups of BOE AMOLED products include glory, oppo, Motorola, LG, etc. Chongqing sixth generation AMOLED production line project not only supplies mobile phones, but also develops vehicle and notebook computer product series.

The reporter learned that in the AMOLED industry, BOE has been continuously distributing production capacity in recent years. In addition to the Chongqing production line, BOE has independently planned, designed and constructed the 6th generation flexible AMOLED production line in Chengdu and the 6th generation flexible AMOLED production line in Mianyang. In the flexible AMOLED industry, the main development direction of AMOLED industry, BOE has become the second largest supplier of flexible AMOLED smart phone screen in the world, and its flexible smart phone screen production capacity will reach 16.66% in 2020.

Lin Zhi, chief analyst of witdisplay, said in an interview, "because BOE has already entered Apple's supply chain, and accelerating the process of Chongqing's 6th generation flexible project through fixed increase, there is an opportunity to increase the supply to apple in the future, which is helpful to the company's revenue."

For the other two construction projects, Nyingchi analyzed that "Yunnan project is mainly aimed at the future AR / VR market. This market has not yet risen and belongs to the layout ahead of time. It will not significantly improve the company's performance in the short term, but it is helpful for BOE to lay out the next generation display technology, which is a strategic consideration. The Chengdu project belongs to medical and intelligent display, which can help BOE expand more application scenarios and reduce more production capacity. "

At present, JD is transforming from a global semiconductor display leader to a global Internet of things innovation enterprise. Smart medical industry is one of the important growth points of its transformation. The construction of Chengdu BOE hospital is an important way for Jingdong to extend its strategy to the smart medical industry sector.

Feng Qiang, senior vice president of BOE and CEO of smart medical industry, said in an interview with reporters that "the hospital is an important platform for BOE to realize intelligent medical work, and build a hierarchical diagnosis and treatment system based on Internet of things technology." It is reported that at present, the business of BOE digital hospital has spread all over Beijing, Hefei, Chengdu, Suzhou and other places.

 

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