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TCL Group (000100): Focus on the panel industry to enhance core competitiveness

TCL Group (000100): Focus on the panel industry to enhance core competitiveness

Focus on the core business and build a comprehensive panel leader. For the first time, the listed platform will cover the core core business of semiconductor display and materials after the restructuring of the “overweight” rating. The semiconductor display capacity is expected to continue to be released in 2019-2021.Income fluctuations.

T1 + T2 maintain full production and sales on large-size panels. The company expects T6 to reach full production by the end of 2019. On small-size panels, T3 will reach full production in 2018Q4. At the same time, the company expects T4 to start production in 2019Q3. We expect small-size panelsThere will be continuous increments.

The company is actively deploying new production capacity at the bottom of the semiconductor display cycle and increasing revenue through continuous reorganization. However, the company’s profitability is optimized and it is expected to usher in scale performance flexibility in the next new industry cycle.

We predict that the company’s EPS for 2019-2021 will be 0.

32, 0.

39, 0.

43 yuan, the first coverage given “overweight” rating.

Panel capacity 佛山桑拿网 was released to maintain panel revenue growth, profitability continued to maintain the industry ‘s leading panel price trough, and the company ‘s panel capacity was released to maintain panel revenue growth.

In 2019Q1, Huaxing Optoelectronics achieved an expansion area of 5.56 million square meters, +17 in ten years.

1%; operating income 72.

500 million, ten years +12.


Although mainstream panel prices have fallen by as much as 34% (wind data show that from January to March 2019, the average prices of 32-inch, 43-inch, and 55-inch panels were -34%, -20%, and -20% respectively), the company T3 since 2018Q4 Since the full production and sales and the T6 production capacity has climbed, the expansion has continued to increase, providing incremental revenue.

And Huaxing Optoelectronics maintains industry-leading 杭州桑拿网 operational efficiency, and in 2019Q1 Huaxing Optoelectronics achieved net profit6.

8.3 billion yuan, net profit 10,000 yuan 9.

4% (both BOE A and Shentianma A were 3 in the same period.

2%, 4.


The short-term panel price base is expected to increase, the domestic panel industry continues to strengthen the advantages of panel prices close to cost, the domestic industry’s scale and cost advantages, and the future industrial chain is expected to accelerate the concentration of domestic.

Display panel prices have continued to decrease since the third quarter of 2018. According to witsview data, panel prices are close to the cost line of panel manufacturers. In the new round of reshuffles, overseas manufacturers have relatively disadvantaged costs, or are the first to reduce production or shut down. Samsung expects 2019In the third quarter of this year, the L8 production line was closed (the capacity is about 160,000 pieces / month, and the main supply is 32 and 55 inches).

We believe that as overseas production capacity is cleared or passively contracted, it is expected to slow down panel prices, build bottom expectations, and replace them. Panel capacity will be concentrated in China, which will tend to enhance the domestic industrial chain advantage. The leading panel companies represented by China Star will have cost advantages.Or further enhanced.

Medium and long-term demand will no longer increase in TV, mobile phones, business display and other fields or become new growth points. Huaxing Optoelectronics seized market share during the industry’s trough period, while continuing to maintain industry-leading operation efficiency, and continued to profitably lay out multiple areas in advance, consolidating industry advantages.
In the future, display demand scenarios will be more diverse. In addition to traditional TVs, displays, mobile phones and tablets, Shangxian and the automotive market are expected to grow rapidly. IHS is expected to show that demand will maintain a compound annual growth rate of about 5% by 2024.

It is estimated that it will take time to implement the switching logic. High-quality assets are finally expected to be approved by the market. We expect the company’s EPS in 2019-2021 to be 0.

32, 0.

39, 0.

43 yuan, the average PE price-earnings ratio of comparable companies in 2019 is estimated to be 19.

09 times, considering that the company has just completed its business reorganization, Q2 has no longer consolidated assets and reorganized its assets. The market still needs time to realize the company’s estimated switchover. We temporarily give the company a certain valuation discount and give the company a PE valuation interval in 2019Is 12.


5 times, the corresponding price range is 4.


64 yuan, the first coverage given “overweight” rating.

Risk reminders: The panel industry’s prosperity is shifting and competition is intensifying; raw material prices are unfavorably fluctuating; unfavorable changes in Sino-US trade frictions; and unfavorable changes in the RMB exchange rate.