建议关注：诺瓦星云(301589.SZ)、兆驰股份(002429.SZ)、洲明科技(300232.SZ)、奥拓电子(002587.SZ)。In the past, the main reason that limited the penetration of LED movie screens was that the investment cost of LED screens was several times that of traditional projection solutions (non-IMAX), but as the LED industry chain continues to reduce costs, the cost gap may continue to narrow, and new cinemas are expected to choose more LED screens.
The Zhitong Finance App learned that CICC released a research report stating that recently, 6 departments including the National Development and Reform Commission issued the “Implementation Plan to Promote Equipment Renewal in the Field of Culture and Tourism” to implement high-tech promotion actions in the film industry, encourage the use of new technology and equipment such as artificial intelligence, virtual shooting, and virtual preview in film filming and post-production, establish and upgrade cloud production platforms and cloud data centers, and implement large-scale cinema LED screen projection system update plans. LED displays have completed full coverage of the domestic industry chain and are capable of independent technological innovation. I am optimistic that after the launch of the “Plan”, demand for cinema updates is expected to contribute to the increase in the LED industry and drive the continuous growth of the market size.
Key recommendations: Carlet (301391.SZ), Riyadh (300296.SZ), Xinyichang (688383.SH), Guangfeng Technology (688007.SH), Sanan Optoelectronics (600703.SH).
Recommended attention: Nova Nebula (301589.SZ), Zhaochi Co., Ltd. (002429.SZ), Zhouming Technology (300232.SZ), Alto Electronics (002587.SZ).
The main views of CICC are as follows:
Movie LED screens have obvious advantages over projection, and continued cost reduction may drive increased penetration
According to statistics from the National Film Administration, the number of national screens reached 86,300 yuan in 2023. At present, there are few LED cinema screens in China, and the vast majority of cinemas still use traditional projection technology. Judging from the comparison of technology and supply chain, projection is based on DLP reflection time projection. The main product suppliers include overseas brands such as Christie, Barco, and NEC. DMD chips are basically monopolized by Texas Instruments; LED screens use active light emission technology, which is superior to projection in many display parameters, and LED screens have completed domestic coverage of the entire industry chain, and chips, packaging, and display modules are in the leading position in the world.
CICC believes that in the past, the main reason that limited the penetration of LED movie screens was several times that of traditional projection solutions (non-IMAX), but as the LED industry chain continues to reduce costs, the cost gap may continue to narrow, and new cinemas are expected to choose more LED screens to provide viewers with a high-quality viewing experience.
The LED cinema market has strict requirements for product certification, and the advantages of early layout of leading brands are obvious
In November 2023, the National Film Administration issued the “Technical Requirements and Measurement Methods for Digital Cinema LED Cinemas” to clarify LED cinema screen parameter requirements. Furthermore, during the video broadcast process, due to content copyright security considerations, screens are required to pass DCI (DigitalCinemainitives) certification before international blockbusters are screened. According to official websites and announcements such as Riyadh, Zhou Ming, and Zhongying Guangfeng, the above companies have laid out LED movie screens in advance, and many products have passed DCI certification. CICC believes that with strict requirements for LED cinema screens at home and abroad, leading companies are planning ahead of schedule, they are expected to take the lead in benefiting from the demand for cinema screen updates in the future.
LED screen penetration drives value increase in multiple parts of the industry, and LED display control core benefits
CICC believes that considering that LED screens have higher requirements for display effects and have stricter requirements for chip consistency, package yield, and module durability and stability, the ASP for related products may be higher than traditional products of the same size, which is expected to increase the average ASP in all aspects and improve profits. In addition, cinemas have obvious demand for 4K/8K and 3D film source playback. LED video processing equipment functions are more complex, which is expected to increase the value of related products, and considering that operating systems also have verification requirements. LED cinema updates are expected to further promote the trend of concentration of video processing equipment and increase ASP of related products.
Risk factors: Implementation of the “Plan” fell short of expectations; LED screen penetration was less than expected.
