BOE: Sharp, the original shareholder of China Electronics Panda, did not exercise the right of first refusal

 On November 24, BOE issued an announcement stating that the company received a notice from the property rights exchange on November 23, 2020. As of November 20, 2020, Sharp Corporation, the original shareholder of Nanjing China Electronics Panda, had not exercised its right of first refusal to the transfer target. According to the requirements of the property rights transfer announcement, the company has obtained the final transferee qualification.

On September 8, 2020, the shareholders of China Electronics Panda publicly listed the transfer on the Shanghai United Equity Exchange Co., Ltd. (hereinafter referred to as the "Equity Exchange") and publicly solicited transferees in accordance with legal procedures. It is planned to solicit one transferee, and the total equity transfer ratio is 80.831%.

The board of directors of BOE agreed to the proposal that the company intends to acquire part of the equity of Nanjing Flat Panel Display at a price not lower than the listing price. On October 19, the company received a notice from the property rights exchange that it had obtained the transferee qualification; and the two parties signed the "Property Rights Transaction Contract" on the same day.

It is understood that BOE plans to acquire 80.831% of the shares of Nanjing China Electronics Panda Listing and 51% of the shares of Chengdu China Electronics Panda Listing. The total transaction amount is approximately 12.12 billion yuan.

The two LCD production lines of China Electronics Panda are the 8.5-generation line in Nanjing and the 8.6-generation line in Chengdu. Among them, the 8.5-generation line produces TV, IT and mobile phone products, and the 8.6-generation line produces large-size TV products. After the acquisition is completed, Qunzhi Consulting predicts that it will have a significant impact on the competitive landscape of the TV and IT panel markets.

In the IT market, relying on its IPS and IGZO technology advantages, CEC Panda has actively developed in the IT market. Therefore, its market share has been rising over the past two years. In the display panel field, it has close cooperation with TPV; in the notebook panel field, it has close cooperation with ASUS, ACER, and Xiaomi. Based on this, the acquisition has two impacts on the competition landscape of IT applications.

Currently, BOE is the largest supplier in the IPS monitor camp, but its performance in the consumer e-sports market has been relatively sluggish in the past. If CEC Panda's oxide production capacity can be effectively utilized and combined with its own technical capabilities, it will further consolidate the competitiveness of its e-sports product line, improve its supply capacity, and lay a solid foundation for its growth in the main e-sports market segment.

In addition, BOE ranks first in the global notebook panel market with a market share of 28%, which is already highly competitive. CEC Panda's notebook product line based on IPS+Oxide has a strong cost-effective advantage in the gaming notebook product line. After the acquisition, it is mainly reflected in the improvement of differentiated competitiveness in this market segment.

In the TV market, China Electronics' Panda TV products are mainly produced on the G8.6 generation line in Chengdu, mainly using IGZO and VA technologies, focusing on large sizes, with 50-inch, 58-inch and 70-inch as the main products. After active development, it also cooperates closely with domestic and international brands. Sigmaintell believes that BOE is currently the largest supplier in the global TV market, and its scale and competitive advantages will be more prominent after the acquisition.

It can be seen that with the completion of the acquisition, BOE's overall production capacity and market share will be improved. The production capacity and technology of both parties are complementary to a certain extent. If the integration effect is achieved, it will effectively enhance BOE's competitiveness in the global display industry.