BOE’s first operating profitable country is running 20 billion

As consumer electronics continues to pick up, the domestic LCD panel leader BOE A (000725) finally ushered in a performance turning point. On the evening of April 1, BOE’s performance forecast showed that the net profit in the first quarter was about 200 million to 250 million yuan, which was a significant loss compared to the loss of 495 million yuan in the same period last year.

In 2012, BOE achieved a total operating income of 25.76 billion yuan, an increase of 102% over the previous year, and achieved a net profit of 250 million yuan, 150% higher than the profit forecast of 50 million to 100 million yuan in performance forecast. As a result, BOE A finally took the financial subsidies and assets to sell the shadow, the first time in four years to achieve operating profit.

Thanks to the stabilization of the industry and the scale effect of the company, BOE is expected to enter a continuous harvest period.” BOE’s insiders pointed out to reporters that “the global LCD TV panel demand growth in 2013 and 2014 is expected to reach 8% and 10 respectively. According to this judgment, the overall supply and demand situation of LCD TV panels in 2013 and 2014 is still good."

"The main reason for BOE's profitability is the popularity of large-size TVs. From the perspective of consumption habits, large-size LCD TVs are becoming more and more popular among investors. As for whether the follow-up performance will continue to pick up, please refer to the price of the global panel. Trends, from the perspective of domestic supply and demand in the first quarter, the trend of panel companies' earnings recovery is still relatively obvious." A brokerage researcher in Beijing told reporters.

Large-size LCD panel demand is strong

The reporter learned from the industry that in the energy-saving subsidy policy for home appliances released last May, large-size TVs were included in the subsidy list, which directly promoted the price and price of large-size LCD panels.

The data shows that the BOE 8.5 generation line has a main cutting size of 32 inches, and its die price has rapidly increased from $102 at the end of August last year to $107 in December last year, which is about 10% higher than the price increase at the beginning of last year. Boosted by this situation, BOE's performance in the fourth quarter of last year increased significantly. The operating income in the single quarter was 8.638 billion yuan and the net profit was 885 million yuan. In the first three quarters, BOE's net profit was still 635 million yuan.

“The company’s profitability again benefited from the increase in the price of large-size LCD panels in the fourth quarter of last year, and the continuous production of BOE’s various production lines.” The insiders said.

“The production line invested by BOE in the early stage has entered the stage of production. The production capacity released by the 8.5-generation line will also increase steadily, which will play an important role in promoting market share, diluting production costs and achieving economies of scale.” He Zhenghua, Senior Research Fellow, China Investment Advisory Tell the reporter.

In addition, the reporter learned from the industry that due to the contradiction between "large domestic demand" and "high import rate of TV panels", Chinese home appliance manufacturers objectively have the internal motivation to get rid of TV panel imports.

"The recent high exchange rate of the yen has led to higher panel prices, indirectly inhibiting the export of Japanese panel companies, and boosting the demand for domestic LCD panel makers." Luo Qingqi, an expert in the home appliance industry and a senior director of Paler Consulting, told reporters. "From the perspective of cost control, the domestic product line led by BOE is mature, and the scrap rate of building panel lines is low. Under the sales volume, the scale effect is expected to further reduce costs and promote competition."

In 2013, the demand for LCD panel will pick up and the performance of BOE will continue to improve. Everbright Securities researcher Yan Jian pointed out that due to the impact of production capacity such as shutdown, the 2013 panel supply will be the slowest growth in recent years, and the average size of the panel will affect the demand. The area continues to grow and the supply and demand relationship will continue to improve. "We judged that the seasonal adjustment of the LCD panel will pick up the warmth in the second quarter at the latest. The price adjustment should be within 5%. It is still a high probability event to fall above the break-even point of the BOE 8.5 generation line."

CDB 20 billion

With the performance continuing to pick up, CDB has even extended its financial assistance to BOE. On January 6, BOE and China Development Bank Beijing Branch signed the "Development Financial Cooperation Agreement". From 2013 to 2014, the total amount of cooperation financing between the two parties on various financial products was 20 billion yuan, including the company's major industrial projects. Five aspects of working capital loans, trade finance of companies and subsidiaries, domestic and overseas M&A projects, and securities business.

“China Development Bank has long supported the construction of various national key projects such as the national pillar industry and high-tech industries. The policy behind it is often supported by policy support. The CDB’s continuous blood transfusion to BOE actually encourages state-owned LCD panel companies to do bigger things. Strong, has a strong strategic significance." A four-person banker pointed out to reporters.

Judging from the three quarterly reports last year, BOE's financial expenses increased by 504% year-on-year, which was due to the increase in net interest expenses. Judging from the top five long-term borrowings of the company's semi-annual report, CDB has the top three seats and is the main loan bank of the company. The ending balances of the three long-term loans were 3.795 billion yuan (foreign currency 600 million yuan), 3.432 billion yuan (foreign foreign currency 543 million yuan), and 2.006 billion yuan, and the total amount of the end of the local currency was as high as 9.233 billion yuan.

"The state-owned background has brought significant convenience to BOE in terms of policy and capital. The 20 billion yuan financial cooperation credit has eased the company's financing pressure." He Zaihua told reporters, but the policy propensity to abandon the policy, the independent LCD industry still faces structural adjustment. Key issues such as capacity optimization and technological innovation, and rapid innovation in the field of LCD panels, especially whether the world's giants such as Apple will launch a new generation of tablet PCs is not known, which has laid a major hidden danger to the continued recovery of BOE's performance.

(This article is reproduced on the Internet. The texts and opinions expressed in this article have not been confirmed by this site, nor do they represent the position of Gaogong LED. Readers need to verify the relevant content by themselves.)

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