Author: Liu Jihong
Picture: Internet
Second uncle is carrying the burden and moving forward. Xiao Zhou has a peaceful life. Xiao Zhou has six sets at home. How many sets do you have? Retail investors of
TCL Technology (000100) answered: "I was trapped in the stock market!"
Although this is a joke, it reflects the current situation of panel stock investors including TCL Technology: 's stock price has been cut in half for more than a year, and many people have been trapped.
However, in order to compete for the "boss", even though the current stock price has cut from the high level when the plan for the private placement was released in April last year, and even lowered the amount of funds raised in the middle, TCL Technology still insists on completing the private placement. You should know that Li Dongsheng and his joint actors hold a shareholding ratio of only slightly more than 8% in the listed company TCL Technology. They risk that 's equity is diluted again and their control is declining to insist on the private placement. It seems that Li Dongsheng vows to carry out the "squeezing competition" to the end!
The mainland has risen to the LCD overlord
LCD panel The industrial competition between China, Japan and South Korea, three countries and four places has become clear: Japan's defeat has been decided, South Korea retreats to the high-end, Taiwan survives, and the mainland has risen to the overlord.
TV is the main area of LCD panel production capacity consumption, accounting for about 70%. According to IDCh data, from January to May 2022, BOE , Huaxing Optoelectronics , LGD, Huike , and Qunchuang Optoelectronics ranked among the top five in the global large-size LCD panel market with market share of 27.20%, 17.80%, 11.80%, 10.10% and 10% respectively (by shipment area). Since the beginning of this year, Chinese panel manufacturers have stable share of shipments in the global market at more than 65%.
DISCIEN recently released data showing that BOE, Huaxing Optoelectronics and Huike ranked among the top 3 global TV panels in the first half of the year, showing counter-trend growth year-on-year, with market share reaching 60%. With Rainbow and Panda, the market share of mainland panel factories will exceed 60%.
Figure 1: 2022H1 global TV panel factory shipment performance
Data source: DISCIEN; unit: M, %
BOE (BOE) ranked first with 32.7M shipment in the first half of the year, with increasing by 9.1% year-on-year, accounting for a proportion 24.4%, ranking first;
CSOT (Huaxing Optoelectronics) shipped 23.7M in the first half of the year, an increase of 17.9%, ranking second;
HKCh (Huike) shipped 22.9M in the first half of the year, an increase of 16.5%, ranking third;
INX (Qunchuang) shipped 18.2M in the first half of the year, a decrease of 5.5%, ranking fourth;
LGD ( Lejin shows ) shipped 10.3M in the first half of the year, down 11.6% year-on-year, ranking fifth;
CHOT (Rainbow Optoelectronics) shipped 8.3M in the first half of the year, up 11.2% year-on-year, ranking sixth;
AUO (AUO Optoelectronics) shipped 8.1M in the first half of the year, down 13.6% year-on-year, ranking seventh;
Sharp (Sharp ) shipped 6.0M in the first half of the year, and under the influence of VD reduction of major customers, it decreased by 31.3% year-on-year, ranking eighth;
SDC (Samsung display ) shipped 2.1M in the first half of the year, an increase of 3% year-on-year. After postponing the VD department's request, production was stopped in late May, and the line was officially closed after clearing the inventory.
It can be seen that in the field of large-size TV panels, Taiwan’s Double Tiger Group Chuang and AUO, South Korea’s two giants LGD and SDC, and Japan’s only remaining single Sharp all showed a significant decline in shipments in the first half of the year, but only mainland major manufacturers grew against the trend.
display (MNT) panel is the second largest area of LCD panel production capacity consumption, and its share is also moving closer to mainland Chinese manufacturers. According to data from Aovirewo, the market share of mainland display panels increased from 49% at the beginning of the year to 55% in the first half of the year, and is expected to expand to 60% by the end of 2022. CSOT and HKC significantly stir up the supply system and squeeze the space of the Korean and Taiwan factories.
Figure 2: Market competition pattern of monitor panels
Data source: AVC Revo; unit: %
On horseback t9 to compete for the "boss"
However, although mainland China has undoubtedly become the main source of LCD panels, the rankings between internal enterprises have not yet been completely settled.
From an industry perspective, BOE is undoubtedly the leader. The five mainstream fields of TV, MNT, Mobil, NB, and Pad have been ranked first in the world for many years. Originally, Huaxing Optoelectronics (a subsidiary of TCL Technology) has firmly taken the position of second place in large-size panels, but Huike has emerged halfway. After the 4 8.x lines are completed, the momentum is rapid, and the medium and large-size production capacity is close to Huaxing. From Figure 1 and Figure 2, it can be clearly seen that Huike's TV panel and MNT panel shipments are not far from Huaxing.
The second one who doesn't want to be the boss is not a good company. Although Huaxing Optoelectronics is threatened by Huike, TCL chose not to stick to the second, but to shout out a grand goal: is based on squeeze-based competition and dares to compete for the "boss" .
This is one of the five requirements put forward by Li Dongsheng for the work of TCL Group in early 2022.
You Huike can build a production line, and I can do it too. Besides, I have built the world's highest generation line for the 10.5th generation, and I have built two (Shenzhen t6, t7).
In order to move towards the goal of "boss", TCL Technology decided to make up for the shortcomings in the field of medium-size IT. In addition to acquiring the original Suzhou Samsung 8.5 generation line (now Huaxing t10), the company also decided to build the 8.6th generation oxide semiconductor new display device production line (i.e. T9) in Guangzhou. continues to squeeze the share of other players, especially Korean and Taiwanese players. The total investment of the
t9 project is 35 billion yuan. It is a production line of the 8.6th generation oxide semiconductor new display device with a capacity of about 180,000 pieces per month for processing 2250mm×2600mm glass substrates. It mainly produces and sells medium-sized high-value-added IT display screens (including MNT, NB, flat panel), vehicle displays, professional displays such as medical, industrial control, and aviation, and commercial display panels.
project main body Guangzhou Huaxing Radio and Television Semiconductor Display Technology Co., Ltd. registered capital is 17.5 billion yuan. Among them, state-owned enterprises coordinated by the Guangzhou Municipal People's Government and the Guangzhou Development Zone Management Committee subscribed 7.875 billion yuan in cash, with a shareholding ratio of 45%. TCL Huaxing subscribed 9.625 billion yuan in cash, with a shareholding ratio of 55%. The difference between Guangzhou Huaxing's total investment and registered capital will be resolved through any method that complies with Chinese laws, such as Guangzhou Huaxing's syndicated loans.
has been completed and put into production for three years since the t9 project was completed and put into trial production. State-owned enterprises coordinated by the Guangzhou Municipal People's Government and the Guangzhou Development Zone Management Committee have the right to require TCL Huaxing or a third party designated by TCL Huaxing to repurchase the equity of Guangzhou Huaxing held by the Guangzhou Municipal Government and the Guangzhou Development Zone Management Committee under the t9 project. The company shall bear joint and several liability for the equity repurchase obligation of TCL Huaxing in accordance with the agreement. guarantee guarantee .
is an important supporting measure. TCL Technology announced its plan to build t9 in April last year and released a plan for a private placement. At that time, the private placement was planned to be no more than 12 billion yuan, of which 9 billion yuan was used for the Guangzhou Huaxing T9 project, and the other 3 billion yuan was used to supplement the company's working capital. However, in November last year, with the decline in TCL Technology's stock price, the company's plan for private placement shrank, and the t9 project still plans to raise 9 billion yuan, but the supplementary liquidity funds decreased to about 1.38 billion yuan, and the total scale of private placement decreased to about 10.38 billion yuan.
The road to this private placement is bumpy. The assets of listed companies such as Shanghai Bank equity, Huayangnian equity, and Zhonggang Capital have all been questioned by regulators. TCL Technology has had to transfer its equity such as Huayangnian to TCL Industry, which is actually controlled by Li Dongsheng. Let me say more about it here. TCL Industry was also divested from a listed company two years ago.
On the evening of the 25th of this month, TCL Technology issued an announcement stating that this private placement was approved.
will carry out "squeezing competition" to the end
from the first release of the plan in April last year to the approval, the time spans one year and three months. In the past year, has taken a sharp turn for the worse, both in the industry situation, panel price, and TCL Technology's stock price and performance.
First look at the industry situation. Since the third quarter of 2021, the price of TV LCD panels has continued to fall, and the panel prices have been cut in half or thighs so far. Taking the 32-inch TV panel as an example, it reached the highest price of $90 per tablet in August last year, but the latest price shows that it is only $28 per tablet, which has been falling below the total cost and cash cost. The current price of has reached the cost of BOM. If it falls again, it will even lose money on the material.
Figure 3: Price trend of mainstream size LCD TV panels in the past two years
Source: WitsView, stock market dynamic analysis and charting
MNT panel prices fell a little later, but they continued to fall. According to data from AVRW data, as of June 2022, the key size panels have fallen below the level before the rise at the beginning of 2021. Among them, the price of 27-inch IPS panel fell to US$49.3; the price of 23.8-inch IPS panel fell to US$40, the price of VA panel fell to US$33.2; the price of 21.5-inch TN panel fell to US$27.5. Moreover, the market generally predicts that the price of monitor panels will continue to decline in the third quarter.
Figure 4: Display key size panel price change trend
Data source: AVCRevo Unit: USD
LCD panel prices continue to fall, and leading manufacturers have planned to reduce production in the third quarter. Omdia expects that in June and July 2022, the monthly capacity utilization rate of display panel manufacturers is expected to drop to 70% and 69% of the designed capacity respectively, setting a record low in ten years.
According to the latest production cut plans of various panel factories compiled by DISCIEN in June, almost all leading manufacturers have joined the ranks of production cuts. Huaxing is no exception. The two 10.5-generation lines, Shenzhen T6 and T7, which focus on TV, and Suzhou T10, which focus on MNT, have all joined the production cut team.
Figure 5: Panel factory production reduction plan and output impact
Data source: DISCIEN; Unit: sheet, M
calculated by area, the area of a glass substrate of t9 is 5.85 square meters, and the annual production capacity is 5.85* 12*18=12.636 million square meters, while the global MNT display panel shipment area last year was about 30 million square meters. Taking into account the production rate, , yield and other factors, it is conservatively estimated that the production capacity of the project will be more than 10 million square meters after the project reaches full production. If the MNT panel is all cut, the production capacity of t9 is close to one-third of last year's demand. Even if the MNT is not cut, this proportion may be not small, and the supply and demand balance is facing a huge impact.
And the worst thing at the moment is that the demand is gone. There are two reasons: First, the epidemic has put the consumption in Europe and the United States in advance, so there is a panel price upward cycle in the past two years. Now that Europe and the United States have relaxed control, demand will inevitably decline; second, major economies around the world are facing high inflation, and optional consumption represented by consumer electronics is obviously the first to be affected. The price plummeted by
, of course, also caused TCL's performance to take a sharp turn. On July 15, TCL Technology released its performance forecast for the first half of this year. Since the semiconductor display industry has not yet reached the bottom of the cycle, the prices of major products are significantly lower than the same period last year. The company's semiconductor display business performance has declined significantly year-on-year. It is expected that operating income in the first half of 2022 will increase by 13%-15% year-on-year, and net profit will decrease by 78%-80% year-on-year.
In the first quarter of this year, TCL Technology's non-restricted net profit was 612 million yuan, while the non-restricted net profit range of this performance forecast is 560-660 million yuan. In fact, if we consider the incremental contribution of TCL Central in the second quarter, Huaxing Optoelectronics' non-restricted net profit in the second quarter is likely to be a loss.
Surprisingly, BOE did not release an announcement on expected performance reduction, which means that the company's performance decline in the first half of the year did not exceed 50%. The reason for the accident is that JD.com suspended B-share repurchase in early July, which once thought that a decline of more than 50% was a foregone conclusion.Some investors joked that BOE's performance not only surprised investors, but also made a fake shot from the company's securities department.
. With the fundamental reversal of the industry situation and performance, TCL Technology's stock price also fell from the highest price of 9.89 yuan on March 22, 2021 to the lowest price of 3.83 yuan on May 10 this year. fell by more than 60%, and its thigh was cut. Whether you buy at a high level or cut in half to replenish your position, you are all trapped.
Figure 6: TCL Technology's stock price trend chart since the beginning of 2021
Source: Choice Data
According to TCL Technology's stock price hovering around 4 yuan in the past two months, and the company's convertible bond conversion price has also been lowered to 4.1 0 yuan, the company's price for this fixed-increase may also be around 4 yuan. We roughly calculate based on 4 yuan. The amount of fundraising of 10.38 billion yuan is equivalent to an additional 2.6 billion shares, which is equivalent to about 18.57% of TCL Technology's current 14 billion shares. This means that if the old shareholders do not participate, they will face nearly 20% of the equity dilution. In the plan, we did not see the information about Li Dongsheng or his joint actors participating. As for whether they will participate after receiving the approval document and officially enter the fixed-increase procedure, it will be known at that time.
Even though the current stock price has been cut from the high level when the plan for private placement was released in April last year, and even lowered the amount of funds raised in the middle, the company still insists on completing the private placement. You should know that Li Dongsheng and his joint actors hold a shareholding ratio of only slightly more than 8% in the listed company TCL Technology. They risk that their equity is diluted again and their control is declining. It seems that Li Dongsheng vows to carry out the "squeezing competition" to the end!
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