Yushun Electronics Will Sell 100% Equity Of Changsha Display, A Wholly-owned LCD Display Module Subsidiary.

China's touch screen network news, overcapacity effect "highlights "! This LCD display module company was sold by the listed parent company. Yushun Electronics announced that the company plans to sell its 100% equity of its wholly-owned subsidiary Changsha by means of joint property rights transaction in Shenzhen, and the listing price is 44.3564 million yuan.
After the completion of this transaction, the listed company will no longer hold the shares of Changsha Display, the main business of listed companies is still the research and development, production and sales of LCD screens and modules, touch screens and modules, integrated touch display modules and other products. This transaction is conducive to further optimizing the company's asset structure and reducing the company's losses, reduce the company's burden, promote business transformation, improve the company's asset quality and enhance the company's sustainable development ability.
The announcement shows that Changsha shows that the net profits of 2017, 2018 and 2019 are-71.3437 million yuan,-70.792 million yuan and-8.2444 million yuan respectively, which are in a state of loss, this time, the listed company will sell 100% of the shares shown in Changsha, which will reduce the risk of large loss of net profit in the consolidated statement of the company and improve the company's operating performance. After the completion of this transaction, the overall profitability of listed companies will be improved.
However, the announcement indicates that after the completion of this transaction, the listed company will sell 100% of the shares shown in Changsha, which can reduce the main sources of losses, but the company's operating scale will also decline significantly. Listed companies will continue to stabilize production, seek profit growth points, and seek opportunities for business transformation at the same time, but there are still some operational risks.
This time, Yushun electronics sold its wholly-owned subsidiary Changsha, which is just the tip of the iceberg where the current LCD overcapacity and product profits have dropped sharply, making it difficult for enterprises to maintain their profits and are forced to sell.
Worries about excess capacity of LCD panel
In fact, China's display industry has long worried about the excess capacity of LCD panels. Especially after Huike Electronics (Shenzhen) Co., Ltd. invested in Zhengzhou 11th generation LCD panel production line project and Mianyang 8.6th generation LCD panel production line project respectively, people in the industry are more worried that the development of China's LCD panel industry is out of control, and the orderly and healthy development of domestic LCD industry will lay multiple hidden dangers, not just overcapacity.
According to statistics, in 2013, the global market share of self-produced panels in mainland China was 11.4%, and the self-sufficiency rate of TV panels was over 35%. By 2016, the market share of self-produced panels in mainland China was nearly doubled, with a shipping area of about 57 million square meters and a global market share of over 30%, it ranks second in the world. By the end of 2017, China's large-size LCD panel production capacity will take up 35.7% of the global share, surpassing the traditional large-size LCD panel manufacturing power South Korea, and China has become the focus of the global panel industry.
Although China has become the focus of the global panel industry, local panel enterprises are competing to launch the high-generation LCD panel production line. The result of rushing up is obvious, that is, overcapacity. According to the statistics of industry associations and third-party research companies, the actual effective supply of LCD TV panels in the world will exceed the demand by 12 ~ 13%. 2017 75 inch global TV panel shipped 156.7 piece, account for all 0.6% of the market, 2018 75 inch global panel shipment will reach 2.55 million piece, with than growth more than 50%.
To present Tokyo Hefei 10.5 generation TFT-LCD production line as an example, early main production 65/ 75 inch of 8K ultra-high resolution LCD display screen mainly design capacity for 0.12 million per month piece glass substrate, compared with 10.5 generation wire (glass substrate size 2940x3370), 8.5 generation wire has obvious advantages in cutting large-size TV. For example, cutting 65 inch, 8.5 generation line can only cut 3 pieces, while 10.5 generation line can cut 8 pieces, and the cutting efficiency can reach 95%. 70 inch or 75 inch, 10.5 generation thread can be cut to 6 pieces.
According to statistics, only BOE has a 10.5 generation line, with an annual output of 65 inch LCD panels of 11.52 million; 70 inch LCD panels of 75 inch or 8.64 million. Based on the 10.5 yield rate of the 70% th generation line officially announced by Hefei BOE, it has reached more than 8 million pieces and more than 6 million pieces respectively, based on the 10.5 yield target of Hefei BOE 90% generation line, which is climbing its production capacity, the production capacity is larger. Taking the TV panel market increment of more than 65 inch this year as an example, the output of a BOE 10.5 generation panel can be fully covered.
In the next year 23 years, with the 10.5/11 generation LCD panel production lines under construction, such as BOE (Wuhan), Huaxing Optoelectronics (Shenzhen), Hon Hai SDP (Guangzhou), Huike (Zhengzhou), etc. being put into operation one after another, and all mass production, it is estimated that the annual production capacity of LCD panels above 65 inch will reach 8.5 to 8.5 pieces, which is not counted as the production capacity of LCD panels below and.
Mainstream LCD manufacturers need to cut production by more than 20%
In fact, the effect of overcapacity has been highlighted. In the past year, many people should be able to feel the benefits of the sharp drop in the price of large-screen LCD TVs. 65-inch 4K TVs can reach less than 3000, and 55-inch TVs can even reach less than 2000. The price is surprisingly low.
This round of LCD panel price drop thanks to the domestic LCD panel manufacturers, including BOE, Huaxing Optoelectronics, etc., in the past one or two years to compete for the market, therefore, panel factories such as Samsung in South Korea, LG, Sharp in Japan, qunchuang and Youda in Taiwan not only lost their shares, but also couldn't make any money. They were all losing money.
However, this situation of continuous price cut is not sustainable. Not only the manufacturers from Japan, South Korea and Taiwan, but also the panel manufacturers from mainland China cannot support it. The price will fall below the cost, as a result, these manufacturers all lost money in Q1 quarter. The financial report of Q2 quarter has not been released yet, and it is also expected to lose money.
According to the data of IHS Markit survey, the average capacity utilization rate of global panel manufacturers in Q1 quarter was 89%, and dropped to 82% in Q2 quarter, creating a three-year low. In the current Q3 quarter, manufacturers have to adjust their production capacity, and almost all LCD panel factories have to significantly reduce their production capacity.
Among Japanese manufacturers, Sharp has cut production by 50% in Q1 quarter, and continued to cut production by 20-30% in Q2. The SDP 10.5 generation line built in Guangzhou has also been delayed for mass production. It was originally mass production in September, but now it is planned to mass production by the end of the year.
Among the South Korean manufacturers, LG began to cut production in June, and its 5th, 6 TH, 7.5 and 8.5th generation panel factories are all cutting production capacity, with a reduction of about 10-20%, considering that LG is still the world's largest LCD panel factory as a whole, the actual impact of this capacity reduction is more than that of other manufacturers.
Samsung has already turned its focus to OLED panel. Most LCD panel factories have been shut down. Another 8.5 generation factory will be shut down gradually in Q2 quarter. It is expected that it will be shut down completely at the end of this month and the beginning of next month, turning to QD-QLED panel production.
The domestic LCD panel factory is the main force of price cut, but now it also needs to cut production capacity. The original production capacity of BOE's 10.5 generation line has reached the full production level of 0.12 million substrates per month, mainly producing large screens of 90 thousand and above, but the production will be reduced to about from this month, the production capacity has been cut by about 25%.
In addition, the 10.5 generation line built by boe in Wuhan may be postponed to mass production until the end of this year and the beginning of next year.
Among the Taiwan manufacturers, qunchuang and other companies also adjusted their strategies due to the loss of LCD panel, and changed the equipment to IPS panel, which made the production more complicated and actually reduced the production capacity.