BOE A (000725) Investment Value Analysis Report (1): Looking at BOE from a small size perspective-China’s leading high-quality IoT leader is expected to ramp up in 2020
This article focuses on the analysis of the industry category and advantages of the company from a small size perspective. The company is a domestic leader in high-quality smart display portals for the Internet of Things. It has a well-established layout in the traditional LCD small size field, and has the leading OLED in the country.In 2020, the budget is expected to triple to 60 million pieces, with a market share of over 30%. In the long term, the smart IoT space is in the trillions.
We are optimistic about the company’s technology and industry level, and upgrade to “Buy” rating.
The industry’s technology upgrade path is clear. In the future, it will mainly depend on the OLED game between China and South Korea, and BOE will overtake the important domestic power of South Korea.
From an industry perspective, the small-size display technology upgrade path is mature, and the OLED / LTPS / a-Si technology is sequentially switched.
Among them, China has the advantage of expanding scale, and it has led the world in the segmentation of a-Si and LTPS markets. Japan, South Korea, and Taiwan may partly withdraw and switch to production. South Korea has the advantage of alternative technologies. Small-sized OLEDs currently account for 90% + of production capacity. Internal expansion.The postpartum ratio is expected to rise to 40%; in the future, the game in the small-size display field will mainly focus on China-Korea replacement.
The company’s overall number of OLED products currently ranks 无锡夜网论坛 fourth in the world. Its production lines have been deployed in Chengdu, Mianyang, Chongqing and Fuzhou, with a designed production capacity of 192K / month. The number is expected to triple to 60 million in 2020, with a market share.Over 30%, becoming an important domestic force to catch up with South Korea.
On traditional production lines, the company’s a-Si / LTPS capacity can supply 40% and 10% of the industry respectively, becoming an important source of cash flow.
We have detailed statistics on the global small-size production lines. Looking at the global total of 81 small-size production lines in 2019, the industry’s total supply is 22.36 million square meters and the total demand is 18.5 million square meters. The overall supply-demand ratio is 120%.
The company’s current traditional production lines include 佛山桑拿网 4 a-Si lines + 1 LTPS line.
According to our calculations, the company’s current a-Si capacity supply area is about 40% of the industry, and LTPS capacity supply area is about 10% of the industry.
Of the 5 LCD production lines, the company has completed 3 depreciation, only Ordos 5.
5th generation line and Chongqing 8.
The 5th generation line still needs two years of depreciation and is divided by 8.
The 5th generation line still produces part of mobile phones, and the 6th generation line and below have switched to the production of sensors, special display and automotive, and other high value-added products, which have become an important source of cash flow for the company.
In the future, short-term companies will continue to cultivate mobile phones, and long-term cards will be in the trillions of IoT space.
After more than 20 years of intensive cultivation, the company has now become the leader in the global display panel industry. It has been well-established in the small size field and currently has a total of 9 small size production lines.
In the future, it is expected that the company will continue to develop the mobile phone market in the short term, and the long-term Internet of Everything will open up various internal scenarios including smart home, smart office, smart car association and smart retail, helping the company to enter new fields such as automotive, industrial control, and medical.
From a technical perspective, the company attaches great importance to talent training and R & D innovation, and the number of patents is among the highest in the world.
From a customer perspective, it has covered all mainstream mobile phone customers, and is expanding in emerging markets such as in-vehicle and business display, with customers all over the world.
In addition, the state strongly supports the development of the display industry, and government subsidies also escort the company’s development.
Risk factors: downward panel prices; weak industry demand; slow technological progress; turbulent international policies; less-than-expected customer introductions, etc.
Investment suggestion: The company is the world’s leading semiconductor display panel leader, reorganizing based on its smart port advantages, and shifting to the direction of innovation in the Internet of Things. The small-size OLED layout is leading.
The current company previously corresponds to PB 1 in 2019Q3.
91 times, we are optimistic about the company’s development and the future growth of the display industry, according to the 3rd year of 20192.
5x PB, given a target price of 6.
26 yuan, raised to “Buy” rating.