BOE is scheduled to increase by nearly 20 billion, and the panel industry is expected to maintain a high boom

Core reminder: As the largest fixed increase in the electronics industry this year, panel leader BOE A (000725) plans to raise 19.87 billion yuan in a non-public offering project that lasted nearly half a year and was finally approved by the China Securities Regulatory Commission.

Previously at the 2021 World Display Industry Conference, BOE President Liu Xiaodong said that by 2021, China's display panel shipments will account for more than 60% of the global total. In the future, China's display industry will continue to maintain rapid growth.

Reduce and supplement flow to raise funds

On June 21, the Issuance Review Committee of the China Securities Regulatory Commission reviewed and approved BOE's application for non-public issuance of A shares. At present, the company has not received written approval documents.

On January 16 this year, BOE disclosed the fixed increase project for the first time, and planned to issue 6.96 billion shares to raise 20 billion yuan. As of May 25, the company stated that in order to promote the smooth progress of the non-public issuance of shares, combined with the actual situation of the company, the net fundraising amount was reduced to 19.87 billion yuan, of which the "supplementary liquidity" fundraising was reduced accordingly Among the remaining fundraising projects, the acquisition of 24.06% of the equity of Wuhan BOE Optoelectronics occupies the highest amount of fundraising investment, reaching 6.5 billion yuan.

In response to regulatory inquiries, BOE pointed out that the Wuhan BOE 10.5 generation line project started construction in January 2018, and mass production will be in December 2019. In 2020, it will be in the stage of capacity ramping and yield improvement, and temporary losses are normal; however, With the yield rate reaching the target and gradually reaching full production, Wuhan BOE Optoelectronics' profitability has been fully improved. In the first quarter of 2021, Wuhan BOE Optoelectronics has achieved operating income that has exceeded the operating income of last year, and achieved a net profit of 361 million yuan. The single-quarter profit has exceeded the total cumulative loss from 2017 to 2020.

Through this fixed increase, Beijing State-owned Assets will also strengthen its control over BOE.

In this fixed increase, Beijing State-owned Assets Supervision and Administration Commission's Jingguorui Fund will spend 4 billion yuan to subscribe. On January 15, the actual controller of the listed company, Beijing Electronic Control, a subsidiary of Beijing State-owned Assets Supervision and Administration Commission, and Jingguorui Fund signed the "Agreement of Action in Concert". In the general meeting of shareholders, when exercising shareholder rights, voting, and voting in concert with Beijing Electric Control, we will consolidate Beijing Electric Control's controlling position in BOE.

At present, Beijing Electronic Controls has a total of 11.32% of the shares of listed companies that have disposable voting rights.

In 2014, BOE will raise 44.8 billion yuan in additional funds, setting the largest A-share fundraising scale at that time.

From the perspective of market performance, BOE’s share price has undergone a wave of adjustments since the release of the fixed increase plan, down about 5%, and is now basically stable. The latest share price fell by 1.27% to close at 6.22 yuan per share. In terms of funding, on June 21, BOE A had a net outflow of up to 752 million yuan for the entire day of a large order.

China panel shipments

Will exceed 60% of the world

At the 2021 World Display Industry Conference hosted by the Ministry of Industry and Information Technology and the People’s Government of Anhui Province, BOE President Liu Xiaodong stated that it is expected that by 2021, China’s display panel shipments will account for more than 60% of the global total. It will exceed 70% in 2025; the display industry in mainland China will continue to maintain rapid growth in the future.

According to reports, BOE has deployed 16 semiconductor display production lines across the country. Today, one of every four displays in the world comes from BOE. Liu Xiaodong said that from 2019 to 2020, BOE display shipments increased by 7% and shipment area increased by 9%, which greatly exceeded the industry average.

BOE is the panel leader, and company executives are optimistic about the industry boom this year.

In a recent institutional survey, company executives said that according to third-party consulting agency data, since June 2020, panel prices have continued to rise, and it is expected that the industry will continue to maintain a relatively high level of prosperity this year.

On the demand side, the development of large-size and ultra-high-definition drives the demand for large-size areas to continue to grow, IT demand continues to rise, and the penetration of flexible AMOLED is rapidly increasing; on the supply side, new capacity is limited, inventory capacity is reduced, and it is also limited by glass substrates and ICs. The tight supply and demand pattern of the industry will continue due to the tight supply of raw materials. In terms of industry integration, Korean factories have gradually withdrawn from the LCD market, the industry concentration has increased significantly, and the supply and demand structure has continued to improve.

Benefiting from the active supply chain construction and raw material reserves, BOE is not greatly affected by the shortage of raw materials in the industry, and mature production lines have maintained high utilization rates and maintained a state of full sales and full production. In terms of new production line ramp-up, Wuhan's 10.5th generation TFT-LCD production line is ramping up production capacity according to the established plan, and the number of films in the second quarter has reached 120K/month design capacity; Chengdu's sixth-generation flexible AMOLED production line, Mianyang's sixth-generation flexible The AMOLED production line is in the process of ramping up mass production, and the ramp is currently progressing smoothly; the 6th-generation flexible AMOLED production line project in Chongqing is under construction as planned and is expected to be put into production within the year. In the future, with the release of the company's production capacity, the company's competitiveness in the field of flexible AMOLED will continue to improve.

In MiniLED, the company took the lead in the industry to achieve formal mass production of glass-based active MiniLED products, and mass production and delivery of 75-inch COGMiniLED backlight products.

In addition, according to NH Investment&Securities market organization forecasts, thanks to increased production capacity and diversified customer strategies, BOE's OLED panel shipments will increase by 50% this year, and its global share has reached 6% in May.