Panel industry in the winter to spring, supply and demand gradually balance

In 2015, the global supply of large-size panels increased. According to a report from DisplaySearch, large-size panel supply in 2015 is expected to be 178 million square meters, an increase of only 2.88% from 2014, compared to an average of 9.05% per annum in 11-13 years. With the growth rate, the growth rate of supply dropped sharply. The increase in the supply of large-size panels for 15 years is limited due to three reasons: (1) The reduction in LCD capital expenditure. It is expected that the capital expenditure in 2015 will be reduced by 33.89% compared to 2014, and the capital expenditure will decline significantly; (2) Cutting-edge small and medium-sized generations The proportion of panel size has been increased. Currently, about 20% of the 6th generation lines are used to cut small and medium-sized panels. It is expected that this proportion will gradually increase to 24% in 2015, which will reduce the supply of large-size panels to a certain extent; (3) Japan and South Korea Taiwan and Taiwan accelerated the upgrading of technology, but the new technology is complicated and the yield rate is low, and the capacity of the new production line after the transformation is reduced.

Demand for large-size push panels is booming: With the trend of large screens for consumer electronics such as TVs, mobile phones and tablets, the demand for large-size panel markets continues to rise. It is expected that the total demand for large-size panels in 2014 will reach 153 million square meters. It increased by 9.74% from 2013. DisplaySearch's research report expects that TV consumer demand will increase by 4.31% in 2015, and the demand for large-screen TVs will also exceed 50%, and the TV screen size will increase to 41.54 inches. The demand for large-screen TVs will drive demand for large-size panels. According to the estimate of DIGITIMESResearch, the average TV panel size in 2015 is expected to increase by 1.2吋 to 40.5吋 per year, which will increase the overall demand for large-size TFT LCDs by 8.2%. Larger displays, tablets, and mobile phones will also boost the demand for panels.

In 2015, the balance between supply and demand in the panel industry opened the profitability space for the industry: the panel industry is a cyclical industry with heavy assets, and the oversupply ratio is generally around 10%, indicating that the panel industry is in a balance between supply and demand. According to DisplaySearch, oversupply of the panel industry was above 15% for the four years from 2010 to 2013, and the oversupply ratio reached a peak of 29.15% in 2011, and supply and demand relations gradually improved in the following years. The annual oversupply ratio was 12.81%, and the relationship between supply and demand improved markedly. At the same time, it is expected that the ratio of oversupply in 2015 and 2016 will be 12.94% and 12.90%, respectively, and the supply-demand relationship will tend to be balanced. At the same time, benefiting from the continuous recovery of panel prices, the cash costs will gradually decline, and the profitability of panel companies will be further opened in the near future.

Investment strategy: The winter of the panel industry has passed. With the declining growth rate of LCD capital expenditure, the increase of small and medium-sized panels cut by senior generations, and the upgrading of existing production lines, it is expected that the supply of large-size panels will increase in 2015. The process of large-size TV, mobile phone, tablet and other products will continue to promote the strong demand for large-size panels. We expect the supply and demand of the panel industry will tend to balance in 2015, while rising prices and lower cash costs will expand the elasticity of manufacturers, and the performance of panel companies in the future is expected to increase further.