BOE and Leyard's profits will drop in 2022

In 2022, the demand for display terminals will drop significantly, the semiconductor display industry's prosperity will decline, and product prices will fall to historical lows, resulting in operating losses in the panel industry, and BOE will not be immune to this.

On the other hand, the company's vigorously developed AMOLED panel sales are still not in the same order of magnitude as TFT-LCD, and its innovative business MLED business accounts for less than 1% of its revenue.

BOE's profits will double in 2022, and net profit attributable to its parent company has declined for four consecutive quarters

BOE's 2022 annual report shows that the company will achieve operating income of 178.414 billion yuan in 2022, a year-on-year decrease of 19.28%; net profit attributable to its parent company has declined for four consecutive quartersProfit was 7.551 billion yuan, a year-on-year decrease of 70.91%.

From a quarterly perspective, BOE's operating income has declined year-on-year for three consecutive quarters starting from the second quarter of 2022; while net profit has declined year-on-year for four consecutive quarters starting from the first quarter of 2022, and suffered a loss in the third quarter, with the loss amounting to 1.305 billion yuan.

BOE explained the reasons for the performance changes in 2022 in its previously released performance forecast. First, affected by multiple factors such as frequent geopolitical risks, global inflation, and the impact of the epidemic, global economic growth is weak and consumption continues to be weak. Consumer electronics terminal brand customers are particularly affected. The semiconductor display industry has continued the downward trend in the second half of 2021, and industry performance has continued to decline throughout 2022.

Secondly, due to the significant decline in terminal consumer demand, conservative purchasing strategies of downstream brand customers, and low-price competition in the industry, the supply and demand of semiconductor display products will be lost in 2022. The prices of mainstream products will continue to decline, and the prices of some products will drop significantly. The operating performance of the semiconductor display business will face tremendous pressure;At the same time, some of the company's production lines are still facing greater depreciation pressure, and business performance such as OLED continues to be under pressure.

At the same time, BOE also stated that in the face of industry decline, it has deeply expanded into market segments, focused on the optimization and adjustment of production lines and product structures, and focused on LCD in automotive, e-sports, AR/VR and other fields to improve overall profitability; in OLED, it has significantly increased product shipments, increased the proportion of high-end product shipments, achieved breakthroughs in mass production of automotive, foldable laptops and other products, and accelerated the continuous improvement of its business.

BOE said that in 2022, it will accelerate the promotion of the "Screen IoT" strategy and continue to deepen the "1+4+N+ ecological chain" business development structure. When the strategic goals are basically achieved, after comprehensive consideration of various factors such as the domestic and international environment, its own strategic goals, etc., it will sell part of its SES shares, recover some of its overseas investments, and obtain some profits.

According to BOE's annual report, in the "1+4+N+ ecological chain", "1" refers to semiconductor display, "4" refers to the four main fronts of IoT innovation, sensing, MLED and smart medical industry, and "N" refers to the Internet of ThingsNetwork segmentation application scenarios, "ecological chain" is an industrial ecological development circle built by cooperating with many ecological partners to aggregate industrial chain and ecological chain resources.