The third quarter report of Shenzhen Tianma Visionox reflects the transition period of the small and medium-sized panel industry. There will be scrolling screens next year. The main domestic suppliers of small and medium-sized panels, Shenzhen Tianma (000050.SZ) and Visionox (002387.SZ), have released three quarterly reports in the past two days. In the first three quarters of this year, Shenzhen Tianma's revenue fell by 3.15%, and Visionox lost 26.76 million yuan. This reflects that the domestic small and medium-sized panel industry is in the transition period from LCD screens to OLED screens. The income of small and medium LCD screens is declining, and small and medium OLED screens are still seeking scale and profit.
Shenzhen Tianma (000050.SZ) released its three-quarter report on the evening of October 27th, showing that in the first three quarters of this year, Shenzhen Tianma's operating income was 22.68 billion yuan, a year-on-year decrease of 3.15%; the net profit attributable to the mother was 1.23 billion yuan, a year-on-year increase of 19.04%. Among them, the revenue of Shenzhen Tianma in the third quarter was 8.63 billion yuan, a year-on-year decrease of 2.27%; the net profit attributable to the parent company was 486 million yuan, a year-on-year increase of 24.61%. The decline in revenue was narrowing and the profit growth was increasing.
Shenzhen Tianma is the world's largest supplier of LTPS LCD (low-temperature polysilicon-liquid crystal) mobile phone screens, and is expanding towards flexible AMOLED. In the third quarter of this year, Shenzhen Tianma’s non-public offering of shares raised a net amount of 5.56 billion yuan for the second phase of Wuhan Tianma’s sixth-generation LTPS AMOLED production line. The project is expected to enter mass production at the end of this year. The Xiamen Tianma 6th generation flexible AMOLED panel line project has started this year.
In an investor relations event on September 24, Shenzhen Tianma stated that mobile terminal display products such as smart phones currently account for 70% of revenue, and professional display products such as automotive, industrial control, and medical care account for 30% of revenue. Due to the impact of the epidemic, the demand for 5G mobile phones has been slower than expected, and in-vehicle displays are also facing challenges in the short term. However, the replacement of 5G mobile phones is imperative, and new energy vehicles and unmanned driving will also promote the growth of the in-vehicle market.
As for the AMOLED production line, the first phase of the Wuhan Tianma 6-generation AMOLED project has been mass-produced and shipped to brand customers such as Xiaomi, Lenovo, ASUS, TRANSSION, HTC, LG, etc., and is currently undergoing a transition from rigid to flexible. It is expected that all flexible production capacity will be released by the end of this year; The second phase of the project is the production capacity of flexible screens and is expected to start mass production at the end of this year. In 2021, Shenzhen Tianma's flexible screen production capacity will enter a large-scale release stage, and the Xiamen 6-generation line will be put into production in 2022.
In the LTPS LCD panel business, Shenzhen Tianma's perforated & high refresh rate screens and other shipments accounted for an increase, and the sales of medical products increased significantly. These high value-added products supported the increase in profitability. Shenzhen Tianma is also actively developing technologies such as under-screen fingerprints and under-screen cameras, and increasing the penetration rate of LTPS LCD panels in mid-size products (tablets, laptops) and vehicles to extend the industrial life of LTPS LCD.
Another small and medium panel supplier Visionox (002387.SZ) released its three-quarter report on the evening of October 26, showing that Visionox achieved revenue of 2 billion yuan in the first three quarters of this year, a year-on-year increase of 6.63%; net profit loss attributable to the parent was 2676. 10,000 yuan, an increase of 55.63% year-on-year. Among them, in the third quarter, Visionox achieved revenue of 840 million yuan, a year-on-year increase of 9.8%; net profit loss attributable to the parent was 120 million yuan, a year-on-year increase of 49.43%.
Unlike Shenzhen Tianma, which currently focuses on LTPS LCD panels, Visionox's products are all flexible OLED panels. Judging from its three quarterly reports, its flexible OLED panel business is still at a loss and is still in a ramp-up period for production capacity.
In the investor relations event on September 16, Visionox stated that the Kunshan 5.5-generation line and the Gu'an 6-generation line have continued to improve their yield and utilization rates, and the Hefei 6-generation line is under construction. Flexible OLED smart phone screens have been delivered to customers such as Xiaomi, LG, ZTE, Nubia, and Transsion. In terms of wearable, flexible OLED supplies OPPO Watch, Nubia wrist phone, and Huami flexible wearable products.
Chen Jun, chief analyst of Qunzhi Consulting, said at the 2020 China International OLED Industry Conference on October 17 that OLED technology is showing a diversified and diversified trend. Its smart phone panels include rigid screens and flexible screens, and rigid screens can be integrated into the screen Fingerprint, under-screen camera and other technologies, flexible screens can be divided into four curved surfaces, folding screens, etc. He expects that the volume of folding screen phones will not exceed 20 million units until 2023, and OLED panel manufacturers will have to make a lot of preparations within two to three years. In 2021, there will be a reel screen terminal product release, which will further promote flexible display.
On October 27, Shenzhen Tianma's stock price rose 1.42% to 14.99 yuan per share; Visionox's stock price fell 1.21% to 13.05 yuan per share.
