Vertical Divider

BOE 1H18 Y/Y Revenues and Profits Down 2.5% and 75.6%, Respectively
September 03, 2018
 
BOE, which has at least one OLED Gen 6 flexible and one rigid OLED fab operating, but will little production (~2.5m displays in 1H18) reported revenue down 2.54% Y/Y, net profit (before extraordinary items) down 75.6%, and diluted EPS down 30.9%.   While the Y/Y declines do not come as much of a shock given the decline in panel prices, substantial decline in profitability is noteworthy, although this year’s 1H results included results from BOE’s new sensor division, the new Gen 10.5 fab in Mianyang, and the company’s acquisition of SES Imagotag.  BOE combines its display and sensor sales, which make up much of total revenue.  We estimate BOE display sales declined ~9.2% Y/Y in 1H, slightly better than the industry, which were estimated at- 11.9%.  BOE saw a 8.34% increase in operating costs and a 5.15% decrease in operating income, along with a 10.2% drop in gross margins (17.9% for the period), while BOE’s IoT (+8.3%) and health products (+53.5%) saw y/y increases, but were too small to offset the display sales reductions.
 
IFA started on Aug.31 and Royoleshowed a super thin OLED display that is designed for next-generation smartphones; LGE showed the largest Mini LED panel ousting Samsung’s 146” “Wall” with a 177” device. IHS reported that Apple was pushing to have LTPO replace LTPS as the backplane technology for OLED smartphone displays because it would lower power consumption by 10% -15%. However, they did not provide any cost data, which would require both LTPS and IGZO tools in addition to the standard a-Si tools, which could increase the capex for the backplane by 150%.