BOE's huge loss in China's LCD panel industry where is the spring

Leading China's LCD panel industry, BOE recently released the financial results for the first three quarters of 2011. The financial report shows that from January to September 2011, BOE achieved operating revenue of 8.515 billion yuan, a year-on-year increase of 37.29%. However, behind the slight increase in revenue is the huge loss of profits - BOE's net profit for the first three quarters of the year was RMB -2.143 billion.

The downturn has become the norm in the LCD panel market in mainland China, but its rapid expansion under huge losses has left many people puzzled. People in the industry even suggested that BOE is a bottomless bottomless pit for investors, no matter how much input they can not see returns.

Some experts believe that with the initial losses of the panel industry in Japan and South Korea, and the experience gained after maturity, BOE's current difficulties are only a "liquid crystal cycle." After the cycle, BOE will surely usher in the spring. In response, He Zaihua, a senior research fellow at China Investment Consulting, said in an interview with a reporter from the "China Sankei Shimbun" that from the perspective of industry development, the market outlook for LCD panels is not in doubt, and the demand for liquid crystal displays for various electronic devices will still be met. Maintain growth, so BOE's product demand does not need to worry too much. At present, the concern for BOE is mainly reflected in the serious losses, but we should not neglect the development characteristics of the panel industry to determine the large investment in its early stage, and the benefits are slow. For BOE, do not stare at the loss figures in its financial statements, but to see its future development prospects.

In the absence of liquid crystal panel leaders to lose power, the SASAC gradually began to intervene in resource integration. According to the reporter's understanding, China Electronic Information Industry Group, which has been committed to finding new business growth points, is brewing the merger and acquisition of BOE. Qi Xiaowu, chairman of China Electronic Information Industry Group, once told the media that, as far as the current situation is concerned, the leading position of China Electronics and Information Industry Group in the industry chain is not yet outstanding. From the national strategy level, it has not fully played its role, so , The group has been committed to the layout of the entire industry chain, and the layout of the LCD panel industry is an important part of its overall planning.

The goal of the company is to maximize the pursuit of profits. Even the "big heroes" such as the China Electronics and Information Industry Corporation, who want to acquire a huge loss of BOE, seem to need more reason. Lou Xiaowu once told the media that although the LCD panel business will still bring greater losses to the group, and the huge investment will also bring greater financial pressure, the SASAC requires China Electronic Information Industry Group to become the industry leader. “SASAC not only intends to integrate the resources of the LCD panel industry, but it can even be said that SASAC is a strong booster of this M&A. Promoting China’s electronic information industry group to lay out the entire industry chain and become the industry’s leader, realizing that state-owned enterprises are becoming bigger and stronger. It is the set goal of the SASAC, said He Zaihua.

With the active involvement of industry leaders and SASAC’s dedication to boost, it seems that no one has given up this plan for a panel industry that has not been a success. However, in the context of the global recession of the LCD panel market, where is the spring of domestic LCD panel makers still in the middle?

"Developing technology-intensive industries will take a long process. We don't think that long-term loss-making companies must have no investment value." Huatai Securities, which holds a large number of BOE shares, said that with Intel as an example, its early development was also a difficult one. Faced with the dilemma of forced closure, but under the strong support of the U.S. government and capital markets, Intel has emerged from the predicament for decades before becoming the leader of the global chip industry today. The current BOE has basically completed the path of losses in the early stages of development of the LCD panel industry in Japan and South Korea.

The path of BOE’s losses is not really finished. I am afraid that no one can tell, but the spring of the LCD panel industry will certainly come. It seems that it has become the consensus of people in the industry.

Luo Qingqi, a senior expert in home appliance industry and a senior consultant at Pall Consultants, told the media that China’s LCD panel industry has lagged behind Japan and South Korea and other industrial powerhouses for many years. It cannot expect the domestic panel industry to “put satellites” and overtakes Japan and South Korea overnight. For the panel industry, which has sustained a large amount of investment for several decades, China’s investment and losses have also appeared to be insignificant. As long as we persist in investing, do a good job in scientific research and grasp the market situation, it is only a matter of time before the panel industry welcomes the spring.

He Zaihua also pointed out: “The Chinese panel companies must be willing to step down and increase the technical level of the panel in order to expand market share and gain the trust of customers. This is the key to the domestic panel industry to spend the winter. In the overall sluggish industry Under the circumstance, the domestic panel companies need to be calm and calm in particular, increase the integration of the upstream and downstream industries while improving the technology, and realize the coordinated development of the industry, and promote the early spring of the panel industry.”