With An Offer Of 12.1 Billion, BOE Plans To Acquire The 8.5 And 8.6 Generation LCD Production Lines Of CLP Panda

Today, another important acquisition of LCD industry has been launched.

On September 23, BOE announced that it plans to acquire 51% of the shares of Nanjing CLP panda Display Technology Co., Ltd. (hereinafter referred to as "Nanjing G8.5 company") and Chengdu CLP panda Display Technology Co., Ltd. (hereinafter referred to as "Chengdu g8.6 company").

This means that BOE plans to steer the 8.5-generation LCD production line in Nanjing and the 8.6-generation LCD production line in Chengdu. After the acquisition, BOE will have 5 8.5 generation lines, 1 8.6 generation lines and 2 10.5 generation lines, ranking first in domestic production capacity.

Looking at the purchase amount, the announcement shows that 80.831% of the equity of Nanjing G8.5 company was publicly listed for transfer on September 7, with the listing price of RMB 5591.2214 million. BOE plans to acquire part of the equity of Nanjing G8.5 company at no less than the listing price and part of the equity of Chengdu g8.6 company at no less than the evaluation price.

At the same time, the equity value of Chengdu company is RMB 35255100. Based on this estimate, BOE's purchase price is about 12.117 billion yuan.

At the same time, the announcement also pointed out that at present, the two sides have not signed the final transaction agreement, and still need to be deliberated by the general meeting of shareholders, so there is still uncertainty.

Since the beginning of this year, the news of Nanjing CLP panda's acquisition and reorganization has continued. Previously, 21st century economic reporter learned from the industrial chain that potential bidders include BOE, TCL technology, Shenzhen Tianma, Huike and other domestic panel manufacturers. Now it seems that the two production lines of CLP panda will be taken over by BOE.

Li Yaqin, general manager of sigmaitell, told 21st century economic reporter that BOE's acquisition of CLP panda is the largest acquisition in the history of domestic LCD panel industry. With the landing of the acquisition case, the market share further gathered to the leading manufacturers. According to the prediction of Qunzhi consulting, after BOE acquired the G8.5 & g8.6 generation LCD production line of CLP panda, together with its own capacity expansion, its market share in the global large-scale LCD market will reach 28.9% by 2022. At the same time, the share of small and medium-sized panel factories will be further squeezed. It is estimated that the share of top 5 panel factories in the world will be close to 85% by 2022. At the same time, the acquisition will not only have a significant impact on the competition pattern of TV and it panel market, but also affect the supply chain restructuring of upstream materials and downstream brands.

Huadong technology sells panel to save itself

The subject of this transaction, the panda production line of CLP, originally belonged to the industry of East China Science and technology. However, due to the two consecutive years of losses of East China Science and technology in 2018 and 2019, "delisting risk warning" will be implemented for the stock from April 16, 2020, and the stock abbreviation will be changed from "East China Science and technology" to "* ST dongke".

Due to the downturn of the external LCD industry, the impact of the epidemic situation, and its own business problems, East China Science and technology has been in a state of loss, with a loss of 987 million yuan in 2018, 5.641 billion yuan in 2019, and 778 million yuan in the first half of 2020.

Although this year's year-on-year loss has narrowed, it is still trapped in the loss mire and is on the verge of delisting. Therefore, it has long planned to sell the production line for self-help.

At the same time, since September this year, * ST dongke has also announced that the company will strategically withdraw from the LCD panel industry, sell its shares in Nanjing CLP panda and Chengdu CLP panda, and plan to acquire the OEM manufacturer TPV technology.

In its reply to the inquiry letter of the Shenzhen Stock Exchange, * ST dongke said that in addition to strategic exit from the LCD panel industry, the company's touch display, piezoelectric crystal and magnetoelectric business will also be set up through agreement transfer.

At the same time, in order to avoid delisting and complete business transformation as soon as possible, * ST dongke will acquire 100% equity of TPV technology, which will be implemented in two plans successively, including the plan of selling major assets and paying cash to purchase 51% equity of TPV technology and issuing shares to purchase 49% equity of TPV technology and supporting fund-raising plan.

After this reorganization, Huadong science and technology will acquire 100% equity of TPV technology, and its main business will be changed from LCD panel, touch display, piezoelectric crystal and magnetoelectric to R & D, production and sales of display and LCD TV products.

After the acquisition, it intends to transform itself into an intelligent display manufacturing enterprise, from the upstream industry to the middle and lower reaches.

Why is CLP panda so popular?

First of all, CLP panda production line is concerned by the industry, one of the main reasons is the igzo backplane technology. Igzo (indium gallium zinc oxide) indium gallium zinc oxide is a kind of thin film transistor technology, which belongs to a kind of metal oxide panel technology. With the characteristics of high resolution, high refresh rate, high brightness and low energy consumption, it is the core technology of CLP panda.

A senior analyst in the panel industry told the reporter that igzo panel technology is a necessary technology for large-scale OLED. Neither BOE nor TCL technology has yet to overcome this problem, so they will strive for this opportunity to accelerate the process of OLED research and development, and OLED is an important direction of future display technology.

At present, there is no breakthrough in the field of OLED large-size screen in China. After BOE's acquisition, igzo technology will be enhanced.

Secondly, prior to the recent acquisition and investment of TCL technology, a friend of BOE, first invested in Japan's joled panel company, and will build a large-scale OLED printing line in Guangzhou. Then, it will acquire Zhonghuan group with 10 billion yuan, and then it will take Samsung's LCD production line, and its production capacity will expand rapidly. In the view of the industry, BOE is not willing to give up more LCD production capacity in the competition of CLP panda. Although BOE will not build new LCD production lines, the acquisition of mature production lines can also supplement key technologies and capacity.

On the other hand, if we look at the specific situation of the production line, why is the price of 51% equity of Chengdu production line higher? Among them, the design capacity of Nanjing 8.5 generation line is 60K / month glass substrate, and the main products are mobile phones, laptops, monitors, TV screens, etc., and the mass production time is August 2015; the design capacity of Chengdu generation 8.6 line is 120K / month glass substrate, the main products are 23.8-70 inch TV display screen, etc., and the mass production time is may 2018. It can be seen that the liquid crystal production line in Chengdu is not in mass production soon, and the production line is set up The equipment is relatively new, and the production capacity is also larger.

The announcement also said that the process of VA and oxide of Chengdu g8.6 production line is stable, which can correspond to 8K Ultra HD, high refresh rate and other high-end products, with strong profitability and great potential for improvement; it can economically cut products of 50, 58, 70 inches and other differential sizes, effectively improve BOE's products and production line system, and can effectively interact with BOE's existing production lines in Chengdu, Chongqing and Mianyang One step to strengthen the agglomeration development will greatly promote BOE's future development, so it plans to purchase 51% of its equity at a premium.

Since the beginning of this year, the panel industry has reshuffled. In addition to the withdrawal of domestic enterprises with poor operation, Korean manufacturers have also decided to withdraw from the LCD field. Before that, Liu Jiansheng, a senior analyst of group intelligence consulting TV panel research, told the 21st century economic report: "this year, Korean panel factories will accelerate to turn off LCD (liquid crystal) production capacity, which will have a great impact on the panel pattern. In 2020, China's panel manufacturers' TV panel capacity will account for more than 50%

However, many analysts also pointed out that while the scale of panel manufacturers is growing, they also need to pay attention to risks, and the key is to improve the operation and profitability.