Recently, BOE disclosed its investor relations activity record, which shows that the recovery of demand for TV terminals and panels is expected to accelerate in 2024 due to the impact of large-scale sports events. This year, the company's flexible AMOLED shipment target will continue to grow year-on-year, with an expected increase of over 30%, and a total target of over 160 million pieces. The company has completed the foundation of the 8.6th generation AMOLED production line project and is expected to achieve mass production by the end of 2026. The first phase of Chongqing B12 production line will begin depreciation in 2023, and the second phase will begin depreciation in the first quarter of 2024.

The main content of the discussion is to answer questions from investors, and the Q&A situation is as follows:

1. How does the company look forward to the demand for LCD products and product prices in 2024?

Answer: The overall terminal market is weak in 2023, with sales of the five traditional application terminals decreasing. In the second half of the year, with the arrival of the consumer electronics peak season, the terminal market has rebounded to some extent. Throughout 2023, due to the accelerated recovery of TV large-scale production, the shipment area of TV panels remained stable. Benefiting from the holding of large-scale sports events in 2024, the recovery of demand for TV terminals and panels is expected to accelerate, especially in the context of the continuation of the trend of TV large-size, the shipment volume and area of TV panels are expected to achieve dual growth. In terms of product prices, according to data and analysis from consulting firms, the price increase of LCD TV panels narrowed in May and remained high in June. The price recovery trend of IT products has begun to show signs, with prices of desktop display products increasing in some sizes since March. The increase in May has expanded, and the increase in June has narrowed; The prices of some sizes of laptop products have slightly increased since late April.

2. How to view the changes in productivity in the LCD industry?

Answer: The industry as a whole continues to adhere to the "on-demand production" business strategy. According to data analysis from consulting firms, in March and April, due to the strong demand for downstream brand factories to stock up, the LCD production rate, especially the TV production rate, remained at a high level; As the demand for phased stocking decreases, the LCD industry's turnover rate slightly decreased in May. Considering that the third quarter is about to enter the traditional peak season of the industry, downstream brand manufacturers are still expected to further release their stocking demand.

3. The progress of the company's AMOLED business?

Answer: The company has been laying out in the flexible AMOLED field for many years, has established a production capacity scale and technological advantages, and has accumulated good customer resources, maintaining good cooperative relationships with global mainstream mobile phone brand customers. In recent years, the company's flexible AMOLED shipment volume has maintained a significant growth. In 2023, the flexible AMOLED shipment volume reached nearly 120 million pieces for the whole year, a year-on-year increase of nearly 50%, setting a new high in annual shipment volume. The company's flexible AMOLED shipment target for 2024 will continue to grow year-on-year, with an expected increase of over 30%, and a total target of over 160 million pieces.

4. Why did the company invest in the construction of the 8.6th generation AMOLED production line? Project construction cycle?

Answer: The company has been deeply involved in the field of flexible AMOLED for many years. Based on its accumulated capabilities in technology, products, and other aspects, as well as long-term cooperation with major global brand customers, especially in high-end IT, automotive and other mid size products, the company announced investment in the construction of the 8.6th generation AMOLED production line project in November last year to better meet the demand of flexible AMOLED in the high-end mid size product field. The foundation was laid in March this year, and mass production is expected to be achieved by the end of 2026. At that time, the company will be able to synchronize with international peers, seize the high-end market, and further strengthen its overall competitiveness in the semiconductor display industry.

5. What impact will the application of OLED technology in the IT field have on the existing IT market landscape?

Answer: The company is investing in the construction of the 8.6th generation AMOLED production line project, which will focus on high-end mid size products, especially in the TPC, Notebook, and automotive related fields. Compared to the overall IT market, LCD will still be the mainstream technology choice, and the application of OLED in the high-end market will bring consumers a better experience and more choices.

6. What is the depreciation situation and trend of the company? Chongqing B12 transition to fixed income rhythm?

Answer: The company's depreciation amount in 2023 is about 35 billion yuan, and the expected depreciation amount in 2024 will increase compared to 2023. In terms of inventory depreciation, in recent years, the company has successively depreciated multiple LCD production lines, which will further enhance the cost competitiveness of LCD products. The first phase of Chongqing B12 production line will begin depreciation in 2023, and the second phase will begin depreciation in the first quarter of 2024. The subsequent fixed asset conversion will be carried out in accordance with the relevant provisions of accounting standards, taking into account the yield and operating conditions of B12.

7. Company capital expenditure plan?

Answer: At present, the LCD industry has gradually entered a mature stage from a high-speed development stage of large-scale production expansion. The company's future capital expenditure will mainly focus on the company's strategic planning and strategic implementation. The specific direction of capital expenditure includes new projects, final payments for existing projects, and maintenance of existing production lines. In terms of new project expenses, the company plans to invest in the construction of the 8.6th generation AMOLED production line, with a total planned investment of 63 billion yuan, and equipment investment accounting for more than 60%. According to the project construction schedule, it is expected that capital expenditures will mainly occur in installments over the next 5 years.

8. What is the company's dividend situation?

Answer: The company has been conducting cash dividends and irregular share repurchases for many years, in order to repay shareholders through multi-dimensional means. From 2015 to 2023, the company implemented cash dividends for 9 consecutive years, with a cumulative amount exceeding 20 billion yuan. From 2018 to 2023, the annual cash dividend ratio remained above 30% of the net profit attributable to the parent company, allowing investors to share growth results with the company. In 2023, the company plans to distribute a cash dividend of 1.13 billion yuan, accounting for a significant increase in the proportion of net profit attributable to the parent company in the consolidated financial statements, reaching 44.34%.

9. What is the customer structure of the company?

Answer: The company maintains good cooperative relationships with most global brand customers, and the overall customer structure of the company is relatively scattered. According to the annual report disclosure, the top five customers of the company accounted for 35.76% in 2023, of which the first largest customer accounted for nearly 15%, and the remaining customers were all below 6%. In the future, the company will continue to collaborate with customers to create and collaborate deeply, providing consumers with more and better products.

Source: Investor Relations Activity Record Form

Note: The information in this article is only for the purpose of providing channels for sharing and communication, and does not represent the company's views and positions