Smartphone and tablet panel industry has entered the promotion and stocking season and the new product release season. Meanwhile, the supply-side competition pattern continues to improve, and the overall supply and demand situation is gradually improving. The rebound trend of prices in some subdivided categories in the panel is clear, and the industry is generally stable and improving. It is recommended to pay attention to companies related to large-size LCD and OLED, such as BOE Technology Group (000725.SZ), companies related to large-size LCD like Caihong Display Devices (600707.SH), and companies related to OLED like Visionox Technology Inc. (002387.SZ), Tianma Microelectronics (000050.SZ), and TCL Technology (000100.SZ).

China Galaxy Securities' main points are as follows:

Panel Price Tracking: In May 2024, 1) Smartphone and tablet panel prices: The differentiation trend of smartphone panel prices remains unchanged. The short-term prices of a-si LCD and rigid OLED will stabilize, while LTPS LCD prices will slightly decline. FOLED prices will stabilize at a high level. a-si LCD tablet panels may face greater price pressure, and LTPS LCD tablet panels with improved technical specifications will usher in new opportunities. 2) IT panel prices: Monitor panels are in a state of tight balance between supply and demand, and prices continue to rise. With the recovery of notebook demand, panel manufacturers are strongly demanding higher prices, and prices will slightly rebound. 3) TV panel prices: At present, the supply and demand of TV panels are still in a game period. In the short term, prices of small-size panels will stabilize at a high level, and prices of medium and large-size panels will continue to rise moderately within the acceptable range of whole machine manufacturers.

Industry News & Key Company Announcements: 1) Industry News: Manufacturers such as Apple, Samsung, Lei-niao, and Honor have successively released new products. Among them, the iPad Pro uses OLED panels for the first time, using double-layer serial OLED technology, with a maximum brightness of 1100nit and HDR content partially triggering 1600nit. The trend of Japanese and South Korean manufacturers exiting the LCD market is continuing, and Foxconn's Sakai Display Products Company (SDP) factory in Osaka will be transformed into an artificial intelligence data center. 2) Key Company Announcements: Visionox Technology Inc. and the People's Government of Hefei City have signed an Investment Cooperation Memorandum, which stipulates that both parties intend to cooperate on investment, construction, production, and operation of the 8.6th generation flexible active matrix organic light-emitting display device (AMOLED) production line project in Hefei New Station High-tech Industrial Development Zone, Anhui Province, with a total investment of approximately RMB 55 billion.

Sector Tracking: 1) Performance of panel indices in the past month: From the level of rise and fall, the panel industry index lagged behind the CSI 300 index by 7.41 percentage points and the electronic index by 5.83 percentage points. From the specific data perspective, the rise and fall of the panel industry index was -6.72%, the rise and fall of the electronic industry index was -0.89%, and the rise and fall of the CSI 300 index was 0.69%. 2) Performance of panel indices in the past year: From the level of rise and fall, the panel industry index outperformed the CSI 300 index by 6.7 percentage points and the electronic index by 13.88 percentage points. From the specific data perspective, the rise and fall of the panel industry index was 0.42%, the rise and fall of the electronic industry index was -13.46%, and the rise and fall of the CSI 300 index was -6.28%.

Risk warning

Risks including the slow recovery of downstream demand, lower-than-expected price increases, slower-than-expected technological iteration, and production capacity bottlenecks.