OLED industry chain listed companies H1 performance summary: two companies suffered losses and their net profits plummeted

In the first half of this year, the global spread of the COVID-19 pandemic has brought an impact on the display industry chain. The industry's market size has shrunk, and the supply of raw materials has been insufficient. OLED industry chain listed companies as a whole have been affected to varying degrees, and their performance has shown four different trends.

产业链结构方面，目前我国OLED产业链上游企业业绩受设备和原材料影响较为显著，包括精测电子、劲拓股份、联得装备等；在中游领域，已经形成以京东方、深天马、维信诺等一批处于行业领先位置的企业；而产业链下游企业数量庞大，市场增速巨大，主要包括手机制造、可穿戴设备以及笔电企业等。

Performance distribution shows four trends

Jiwei.com combed through the 2020 semi-annual financial reports of listed companies in the industry chain and found that as of August 31, 14 A-share OLED industry chain listed companies including BOE A, Shenzhen Tianma A, Dongxu Optoelectronics, and Visionox have successively released their performance announcements for the first half of 2020. Overall, 7 companies achieved revenue growth, accounting for 50%; 5 companies achieved net profit growth, accounting for 36%; among them, 4 companies achieved positive growth in both revenue and net profit, accounting for 29%; 6 companies saw a decline in both revenue and net profit, accounting for 43%; another 3 companies had an increase in revenue but no increase in profit, accounting for 21%; and 1 company had an increase in profit but no increase in revenue, accounting for 7%.

It is worth noting that in the first half of the year, Jintuo's performance was eye-catching. While its revenue more than doubled, its net profit soared by 1,224%, far exceeding the other 13 companies. However, the performance of Dongxu Optoelectronics and Xinlun Technology declined significantly, with net profits falling by 206% and 452% respectively.

Based on the analysis of the operating conditions of various companies in their interim reports, the COVID-19 pandemic and the Sino-US trade frictions are the reasons for the performance losses of most companies. For example, Huaxing Yuanchuang said that the decline in both revenue and net profit was due to the impact of the epidemic, which affected the delivery and installation and commissioning of some equipment. At the same time, the epidemic caused some customers to delay the shipment of products and delayed the acceptance of some equipment. Shenzhen Tianma also said that the slight decline in revenue was due to the sudden outbreak of the epidemic and the global economic downturn, which caused the display industry chain to be hit to varying degrees.

However, under the shadow of the epidemic, half of the companies still have good revenue or net profit growth, benefiting from domestic substitution, increased demand from domestic and foreign customers or sales. Jintuo Co., Ltd., an upstream company in the industry chain, pointed out: "The substantial increase in performance this period is due to the import substitution of production equipment by some domestic manufacturers, and the increase in demand for expansion of some overseas customers, and the significant year-on-year increase in overseas sales revenue." Zhiyun Co., Ltd. stated that the increase in revenue was due to the increase in sales of 3C smart manufacturing equipment and mask machines.

As of August 31, among the 14 companies, the current market value of enterprises with a market value of 0-20 billion yuan is the largest, accounting for 79%; there is only one company with a market value of 20-30 billion yuan, accounting for 7%. Among them, BOE's market value is 50 times that of the last-ranked Wald, and its overwhelming market value of 196.6 billion yuan is far ahead of other listed companies in the OLED industry chain.

In terms of revenue, according to Jiwei.com statistics, among the 14 companies, BOE's revenue in the first half of the year exceeded 60 billion, far ahead of other companies, and Shenzhen Tianma exceeded 10 billion. Among them, there are 8 companies with revenue of 100 million to 1 billion yuan, accounting for 57%; there are 4 companies with revenue of 1 billion to 3 billion yuan, accounting for 29%.

It can be seen that in terms of revenue scale, although the industry market scale has shrunk overall due to the impact of the epidemic, the leading companies in the OLED industry chain still maintain an upward trend against the trend. Compared with the revenue of 55 billion yuan in the first half of 2019, BOE's revenue in the first half of this year reached 60.8 billion yuan, exceeding 5.8 billion yuan in the same period last year. In this regard, BOE stated that the reason for the revenue growth was that the overall shipments of display devices continued to rank first in the world, with shipments increasing by more than 15% year-on-year, and the sales volume of innovative application products increased by more than 60% year-on-year, and the sales area doubled year-on-year. In addition, Shenzhen Tianma A and Dongxu Optoelectronics ranked second, with revenues of 14.057 billion yuan and 2.771 billion yuan respectively; Bayi Space and World became the two companies that did not break the 300 million yuan revenue, with revenues of 284 million yuan and 106 million yuan respectively.

In terms of year-on-year revenue growth, there were 7 companies with year-on-year increases and 7 companies with year-on-year decreases, showing a "half-half" situation. Among them, Zhiyun Co., Ltd. and Jintuo Co., Ltd. significantly outperformed other companies in year-on-year growth, with increases of 169.40% and 104.32% respectively. Zhiyun Co., Ltd. stated that the revenue growth was due to the company's active promotion of technology research and development and market expansion efforts in the automation equipment business related to OLED display touch modules. Liande Equipment stated that the increase in demand for flat panel display production equipment in the downstream industry is an important factor in the growth of orders and performance.

It is worth noting that Dongxu Optoelectronics' revenue decreased by 67.31% year-on-year, the largest decrease among the 14 companies. In this regard, Dongxu Optoelectronics said that the epidemic caused operating losses, and due to bond defaults, the company's credit was severely damaged and its operations were affected. Xinlun Technology said that the year-on-year revenue decrease of 26.93% was due to the epidemic and new energy vehicle policies, which had a certain impact on its performance in the first half of the year.

Opportunities and crises coexist

Looking at net profit, 4 out of 14 companies had net profits exceeding 100 million yuan. Among them, companies with net profits of 0-100 million yuan accounted for the highest proportion, reaching 57%; there were 2 companies with net profits of 100-500 million yuan and 2 companies with net profits greater than 500 million yuan, accounting for 14% each. Among them, BOE, the leading enterprise in the industry chain, still ranked first, with a net profit of more than 1 billion yuan, a brilliant performance. However, Xinlun Technology and Dongxu Optoelectronics performed poorly in the first half of the year, with net profits of 42 million yuan and 897 million yuan respectively.

In terms of year-on-year growth in net profit, 5 companies achieved an increase, while the remaining 9 companies showed a downward trend. It can be seen that most of the leading enterprises in the industrial chain and small and medium-sized companies cannot avoid the negative impact of the epidemic on net profit. Among the rising companies, Jintuo shares took the lead with a blowout growth of 1224.72%, far ahead of other listed companies. In addition, Zhiyun shares also achieved an increase of more than 100%.

Meanwhile, the net profits of Xinlun Technology and Dongxu Optoelectronics dropped sharply, by 452.68% and 206.24% respectively. In addition, Visionox's net profit also dropped by 47.30%, with a gross profit margin of 24.1, a year-on-year decrease of 9.29%. It said that the increase in the proportion of AMOLED product sales revenue in the OLED display industry's revenue affected the decline in the gross profit margin of the OLED display industry, resulting in a decline in the gross profit margin of domestic sales. 

Overall, despite the significant impact of the epidemic on listed companies in the OLED industry chain, most companies performed poorly in the first half of the year, with more than half of the companies experiencing both a decline in revenue and net profit, and the overall growth of the few profitable companies was not significant. However, the future development prospects of the industry are relatively optimistic. In May this year, the "new infrastructure" policy proposed by the state injected digital power into industrial development, accelerated the integration of new technologies such as 5G and traditional industries, and promoted a new round of economic growth. Coupled with the acceleration of domestic substitution, in an environment where opportunities and challenges coexist, OLED technology will become the most important core product of 5G mobile phones in the future.