Core Viewpoint - The automotive display panel market is expected to grow significantly in 2024, with domestic companies making notable advancements in a competitive landscape [1] Group 1: Market Performance - In 2023, global automotive display panel shipments reached 230 million units, a year-on-year increase of 8.5% [1] - Chinese manufacturers accounted for 51.7% of global shipments, with BOE leading at 40.9 million units and a market share of 17.6% [1] Group 2: Company Financials - BOE Technology Group's subsidiary, BOE Precision Electronics, reported a revenue of HKD 13.449 billion (approximately RMB 12.572 billion) for 2024, a 25% increase year-on-year [1] - The net profit attributable to shareholders was HKD 391 million [1] Group 3: Business Segments - The automotive display business generated HKD 12.66 billion in revenue for 2024, a 30% increase, constituting about 94% of total revenue [2] - The system business is emerging as a new growth point, focusing on smart display systems and intelligent cockpit systems, with significant revenue growth [2] Group 4: Strategic Initiatives - BOE Precision Electronics has implemented a "three-step" strategy in the intelligent cockpit sector, evolving from display components to complete cockpit solutions [3] - The company aims to transition from a secondary operator to a primary operator in the smart cockpit screen system business [3] Group 5: Future Outlook - The global automotive display panel market is projected to grow at a rate of 5.4%, reaching 250 million units by 2025 [5] - The company plans to enhance its overseas market contributions, targeting over 50% of its revenue from international markets [4]

Core Viewpoint - BOE has introduced the industry's first 15.6-inch L-shaped curved OLED vehicle central control screen, showcasing advanced technology in display design and functionality [1]. Group 1: Product Features - The screen utilizes a thermal bending full lamination process, enhancing the 3D shaping capability of OLED displays [1]. - It features a thin design with a thickness of only 2.5mm, achieved through multi-layer integration of display panels and touch controls in a vacuum environment [1]. - The screen's core component is a 15.6-inch concave vehicle display module, designed with a fixed bending angle of 135° and a bending radius of 35mm, accommodating the natural arm extension of drivers [1]. Group 2: Technical Specifications - The resolution of the curved OLED display reaches 2880*1800, with a brightness exceeding 800 nits, ensuring clear visibility under strong light conditions [1]. - It boasts a million-level ultra-high contrast ratio and millisecond-level response speed, allowing real-time feedback of vehicle dynamic information [1].

Core Viewpoint - 京东方精电's revenue for 2024 reached HKD 134.49 billion, a 25% increase from HKD 107.6 billion in 2023, driven primarily by the growth in automotive display screen business, which accounted for approximately 94% of total revenue [1] Group 1: Financial Performance - The automotive display screen business generated revenue of HKD 126.6 billion, reflecting a 30% year-on-year increase [1] - Revenue from the China region was approximately HKD 83.5 billion, a 35.3% year-on-year growth, representing 62% of total revenue [2] - Overseas revenue was about HKD 50.98 billion, showing an 11.1% year-on-year increase, accounting for 38% of total revenue [2] Group 2: Business Strategy and Growth Areas - The company is focusing on smart display systems, advanced display systems, and intelligent cockpit systems as new growth points, with significant revenue increases in these areas [2] - 京东方精电 plans to invest no less than RMB 1 billion from 2025 to 2027 to enhance AI applications and strengthen competitive barriers in the automotive sector [3] - The industrial and other display screen business generated revenue of HKD 7.89 billion, representing 6% of total revenue, with significant market opportunities identified [3] Group 3: Market Position and Future Outlook - 京东方精电 holds the largest market share in the TFT automotive display market, particularly in shipments of 8-inch and larger displays [2] - The company aims to expand its automotive display business and solidify its market leadership through a three-step development strategy [4] - There is a focus on diversifying into industrial and other display screen applications, leveraging existing resources to capture global opportunities [4]

Core Viewpoint - The recent financial reports from ten display companies indicate varied performance, with some companies showing significant growth while others face declines in revenue and profit margins [1]. Group 1: Company Performance - BOE Technology Group reported revenue of 125.61 billion RMB, a 25% increase year-on-year, but a net profit decline of 18% to 3.65 billion RMB [3][5]. - Xinli International achieved revenue of 166.63 billion RMB, up 14.4%, with net profit increasing by 14.9% to 2.82 billion RMB, driven by smartphone business growth [6][8]. - Deep Textile reported revenue of 33.35 billion RMB, an 8.3% increase, and net profit of 89.37 million RMB, up 12.75% [10]. - Lens Technology saw revenue rise to 698.97 billion RMB, a 28.27% increase, with net profit of 36.24 billion RMB, up 19.94% [12]. - Puyang Huicheng's revenue was 14.11 billion RMB, a modest 2.31% increase, but net profit fell by 18.53% to 1.92 billion RMB [14]. - Landai Technology reported revenue of 35.35 billion RMB, a 25.93% increase, and a significant net profit increase of 134.04% to 1.24 billion RMB [16][18]. - Kaisheng Technology's revenue decreased by 2.32% to 48.94 billion RMB, while net profit rose by 30.76% to 1.4 billion RMB [19][20]. - Nanjing Panda reported a revenue decline of 9.15% to 26.46 billion RMB, with a net loss of 14.14 million RMB [21][24]. - Tiande Yu achieved a revenue of 21.02 billion RMB, a 73.88% increase, with net profit rising by 143.61% to 2.75 billion RMB [25][26]. - GoerTek reported revenue of 1009.5 billion RMB, a 2.41% increase, with net profit soaring by 144.93% to 2.67 billion RMB [27][29]. Group 2: Industry Trends - The display materials industry is undergoing a restructuring, with OLED materials demand increasing due to the growth of OLED panel production [14]. - The touch display panel industry is recovering, with traditional consumer products showing signs of rebound, particularly in automotive and large-size displays [18]. - The demand for smart devices, including VR/MR and wearables, is driving growth in the precision components and smart hardware sectors [29].

Financial Performance - The company reported revenue of HKD 13,449 million for the fiscal year 2024, an increase of 25% compared to HKD 10,760 million in 2023[5]. - EBITDA for the year was HKD 686 million, a decrease of 11% from HKD 771 million in the previous year, resulting in an EBITDA margin of approximately 5.1%[7]. - Shareholders' profit attributable to the company was HKD 391.3 million, down 18% from HKD 475.3 million in 2023, primarily due to reduced government subsidies[6]. - Operating profit decreased to HKD 437,453 thousand, down 23.2% from HKD 569,723 thousand in the previous year[63]. - Net profit for the year was HKD 401,585 thousand, a decline of 16.6% from HKD 481,081 thousand in 2023[64]. - Total comprehensive income for the year was HKD 336,242 thousand, down 26.0% from HKD 454,187 thousand in 2023[64]. - Basic earnings per share decreased to 49.6 cents from 60.4 cents, reflecting a 17.5% drop[63]. Revenue Breakdown - The automotive display business generated revenue of HKD 12,660 million, a 30% increase from HKD 9,710 million in 2023, accounting for approximately 94% of total revenue[9]. - Revenue in China reached HKD 8,350,000,000, representing a 35% increase compared to the same period in 2023, accounting for 62% of total revenue[50]. - Revenue from the China market was HKD 8,349,868,000, up 35.3% from HKD 6,173,725,000 in the previous year[76]. - Revenue in the Americas reached HKD 838,000,000, representing an increase of approximately 47% year-over-year, driven by orders from multiple automotive clients[58]. - Revenue in Japan increased by approximately 50% to HKD 1,157,000,000, contributing about 9% to total revenue, attributed to orders from automotive clients[60]. - Revenue in South Korea grew by approximately 24% to HKD 376,000,000, accounting for about 3% of total revenue, primarily from in-vehicle display business[62]. - The group achieved revenue of HKD 2,444,000,000 in Europe, a decrease of approximately 4% compared to 2023, accounting for about 18% of total revenue[55]. Cash and Assets Management - The company maintained a strong cash position with total cash resources of HKD 4,122 million as of December 31, 2024, up from HKD 3,572 million at the end of 2023[5]. - The company's bank loans decreased by 39% to HKD 376 million from HKD 620 million at the end of 2023, reflecting effective working capital management[5]. - Non-current assets increased to HKD 2,269,640 thousand, up from HKD 1,936,645 thousand in 2023, representing a growth of 17.2%[65]. - Current assets totaled HKD 9,195,302 thousand, an increase of 13.6% from HKD 8,097,225 thousand in the previous year[66]. - Total liabilities increased to HKD 6,499,601 thousand, up from HKD 5,022,791 thousand, indicating a rise of 29.4%[66]. - The company's net assets increased to HKD 4,600,495 thousand, compared to HKD 4,409,711 thousand in 2023, reflecting a growth of 4.3%[66]. Strategic Initiatives - The company has established strategic partnerships with leading new energy vehicle manufacturers in China to enhance its automotive display business[9]. - The company aims to improve profitability by reducing production and operational costs while enhancing product quality and supply chain management[7]. - The company is actively seeking emerging market demands and establishing overseas production bases to mitigate potential impacts from tariffs and geopolitical tensions[18]. - The company is focusing on strategic partnerships with leading automotive manufacturers to optimize product dimensions and enhance R&D and quality systems[21]. - The company is actively exploring overseas acquisition opportunities and establishing international production bases to meet diverse supply chain needs[22]. - The group is implementing strategies including overseas acquisitions and talent development to meet international customer demands[59]. Research and Development - R&D expenditure increased from HKD 237 million in 2023 to HKD 284 million in 2024, with R&D personnel growing from approximately 410 to 450[30]. - The company is increasing investments in R&D to maintain its competitive edge in AI and smart cockpit technologies[24]. - The company has introduced the first integrated display group standard for smart cockpits in the Chinese market in 2024, showcasing its technological expertise and industry leadership[23]. - The company plans to enhance operational efficiency at the Chengdu factory to avoid potential inventory surplus and losses[18]. - The company plans to complete the prototype development of the far-field light field display technology by the first half of 2025, enhancing in-car entertainment experiences[38]. Market Trends and Outlook - New energy vehicle production and sales in China increased by 34.4% and 35.5% year-on-year, reaching 12.9 million units, highlighting the sector's growth potential[16]. - The penetration rate of new energy vehicles in China has exceeded 50%, indicating a shift towards AI, advanced display technology, and large screen functionalities in the automotive industry[21]. - The global automotive display module market is projected to grow with a compound annual growth rate (CAGR) of 3.05% for total shipments, 7.16% for medium and large size shipments (8 inches and above), and 17.24% for oxide and LTPS shipments over the next three years[19]. - The company is strategically positioned to capture the growing new energy vehicle market, with a projected growth rate of approximately 24% in 2025[51]. Quality and Compliance - The company established a Quality Management Committee (QCC) in 2024 to enhance quality control and ensure consistent supplier performance monitoring[12]. - The company received TISAX AL2 certification and ISO/IEC 27001 certification, highlighting advancements in information security management[29]. - The audit committee is responsible for reviewing the group's financial information and risk management systems, ensuring transparency and accountability[108]. - The investment committee is tasked with identifying and selecting suitable investment projects to enhance and transform the group's strategy[111]. Shareholder Returns - The company’s dividend policy remains unchanged, proposing a final dividend of HKD 0.17 per share, down from HKD 0.19 per share in 2023, with a payout ratio of 34%[8]. - Proposed final dividend of HKD 134,568 thousand, down from HKD 150,399 thousand in the previous year, a decrease of 10.5%[63].

根据TrendForce集邦咨询最新调查，2024年受到手机新机销量成长，以及二手机和整新机需求增加驱动， 全球手机面板出货量年增11.4%、达21.57亿片，达到近年高峰 。预估2025年由于新机需求稳定，手机市 场可能回归供需循环，而二手市场需求预计将持稳或小幅下降， 导致手机面板出货量年减3.2%，为20.93 亿片 。 京东方（BOE） 从五大手机面板厂2024年出货量与2025年出货预估来看，京东方（BOE）稳居全球智能型手机面板出货量首 位，2024年出货6.13亿片，2025年可望达6.3亿片，年增2.7%。 三星显示（SDC） 排名第二的三星显示（SDC）受惠于苹果对AMOLED高阶面板需求的支持，以及自家品牌的使用，2024年出 货为3.78亿片。但2025年苹果可能计划性提高其他供应商的供货比例，预计将导致SDC的手机面板出货量小 幅下滑至3.65亿片，年减3.5%。 惠科（HKC ） 惠科（HKC）的a-Si LCD出货量迅速成长后，持续稳定排名第三，凭借其G8.6世代线的成本优势，2024年手 机面板出货量为2.28亿片。2025年由于华星光电（CSOT）也加入a-Si LCD出货竞局 ...

Financial Performance - Revenue for the first half of 2024 reached HKD 6,157 million, an 18% increase compared to HKD 5,210 million in the same period of 2023[12] - EBITDA for the first half of 2024 was HKD 315 million, a 3% decrease compared to HKD 324 million in the same period of 2023[12] - Net profit attributable to shareholders for the first half of 2024 was HKD 172.1 million, a 15% decrease compared to the same period of 2023[12] - Revenue increased by 18% to HKD 6,157,000,000 in the first half of 2024 compared to the same period in 2023, driven by growth in TFT products, touch screen display modules, and automotive system products[41] - Operating profit decreased by 20% to HKD 194,000,000 in the first half of 2024, impacted by price adjustments, inventory costs, and increased operational expenses[41] - Net profit attributable to shareholders for the first half of 2024 was HKD 172,100,000, a decrease from HKD 202,500,000 in the same period in 2023[42] - Revenue for the first half of 2024 increased to HKD 6,157,319 thousand, up 18.2% from HKD 5,210,217 thousand in the same period of 2023[126] - Operating profit for the first half of 2024 decreased to HKD 193,651 thousand, down 19.6% from HKD 240,842 thousand in the same period of 2023[126] - Net profit attributable to shareholders for the first half of 2024 was HKD 172,100 thousand, down 15.0% from HKD 202,512 thousand in the same period of 2023[126] - Basic earnings per share for the first half of 2024 decreased to 21.9 HK cents, down 15.1% from 25.8 HK cents in the same period of 2023[126] - Total comprehensive income for the first half of 2024 was HKD 151,601 thousand, up 10.5% from HKD 137,155 thousand in the same period of 2023[129] - Net profit for the period was HK$172.1 million, contributing to a total comprehensive income of HK$148.324 million[135] - Total equity increased to HK$4,416.822 million as of June 30, 2024, up from HK$4,409.711 million at the beginning of the year[135] - Cash flow from operating activities improved significantly to HK$794.963 million, compared to a negative HK$380.197 million in the same period last year[138] - Net cash used in investing activities increased to HK$1,176.791 million, primarily due to purchases of property, plant, and equipment (HK$436.052 million) and other financial assets (HK$472.154 million)[138] - Cash and cash equivalents decreased by HK$410.638 million, ending at HK$3,074.364 million as of June 30, 2024[138] - Bank loans received amounted to HK$221.64 million, while repayments of bank loans totaled HK$229.708 million[138] - The company paid HK$149.66 million in dividends approved from the previous year[135] - Other comprehensive loss for the period was HK$23.776 million, mainly due to exchange rate fluctuations[135] - The company repurchased shares worth HK$4.731 million under the share incentive plan[135] - Interest received during the period was HK$58.957 million, an increase from HK$46.873 million in the previous year[138] - Total consolidated revenue increased to HKD 6,157.32 million in the first half of 2024, up from HKD 5,210.22 million in the same period of 2023[144] - Government subsidies decreased to HKD 16.328 million in 2024 from HKD 47.783 million in 2023, a significant drop of 65.8%[149] - Interest income from financial assets at amortized cost increased to HKD 58.067 million in 2024 from HKD 48.065 million in 2023, a growth of 20.8%[149] - Net exchange gains decreased to HKD 13.513 million in 2024 from HKD 16.440 million in 2023, a decline of 17.8%[149] - Total other income decreased to HKD 94.770 million in 2024 from HKD 118.568 million in 2023, a reduction of 20.1%[149] - Current tax expense in Hong Kong increased to HKD 15.441 million in 2024 from HKD 6.317 million in 2023, a significant rise of 144.4%[150] - Current tax expense in China increased to HKD 28.103 million in 2024 from HKD 15.730 million in 2023, a growth of 78.6%[150] - Basic earnings per share decreased to HKD 0.219 in 2024 from HKD 0.258 in 2023, a decline of 15.1%[152] - Diluted earnings per share decreased to HKD 0.218 in 2024 from HKD 0.257 in 2023, a decline of 15.2%[153] - Additions to property, plant, and equipment increased to HKD 414.277 million in 2024 from HKD 343.258 million in 2023, a growth of 20.7%[155] - Trade receivables and bills receivable increased to HKD 2.529 billion in 2024 from HKD 2.211 billion in 2023, a growth of 14.4%[157] - Inventory write-down decreased to HK$53.3 million in H1 2024 from HK$92.3 million in H1 2023, with a reversal of HK$12.5 million recognized in profit or loss[159] - Cash and cash equivalents decreased to HK$3.07 billion as of June 30, 2024, compared to HK$3.50 billion as of December 31, 2023[160] - Trade payables and other payables increased to HK$4.24 billion as of June 30, 2024, from HK$3.81 billion as of December 31, 2023[162] - No interim dividend was declared for H1 2024, compared to HK$0 in H1 2023[165] - Final dividend for the previous fiscal year was HK$149.7 million, down from HK$181.0 million in H1 2023[166] - Fair value of financial assets measured at Level 2 was HK$405.8 million, while Level 3 assets were valued at HK$41.9 million as of June 30, 2024[168] - The company repurchased 1,000,000 shares for the share award plan at a total cost of HK$4.7 million in H1 2024[164] - Restricted bank deposits decreased to HK$41.6 million as of June 30, 2024, from HK$55.9 million as of December 31, 2023[160] - No share option plan was active during H1 2024, following the expiration of the previous plan in June 2023[163] - Trade receivables and notes are generally due within 60 to 90 days from the invoice date[158] Cash and Liquidity - Cash resources as of June 30, 2024, totaled HKD 3,944 million, an increase from HKD 3,572 million at the end of 2023[12] - Bank loans as of June 30, 2024, amounted to HKD 607 million, a 2% decrease from HKD 620 million at the end of 2023[12] - The company maintains a strong cash position with net cash status, supported by strict working capital management[12] - Total assets reached HKD 10,808,000,000 as of June 30, 2024, with a 7% decrease in inventory to HKD 1,803,000,000 due to effective inventory management[41] - The company's liquidity investment portfolio increased to HKD 3,944,000,000, with cash and term deposits totaling HKD 3,496,000,000[43] - Inventory turnover ratio improved to 6 times, up from 5 times at the end of 2023, reflecting better inventory management[43] - Cash flow from operating activities was HKD 795,000,000, compared to a cash outflow of HKD 380,000,000 in 2023[46] - Net cash used in investing activities was HKD 1,177,000,000, including HKD 436,000,000 for the purchase of property, plant, and equipment[46] - The company's bank loans decreased to HKD 607,000,000, with a debt-to-asset ratio of 13.7%, down from 14.1% at the end of 2023[43][46] - Cash and cash equivalents as of June 30, 2024, were HKD 3,074,000,000, with RMB-denominated cash decreasing to HKD 1,591,000,000[44][45] - The company's foreign exchange risk is primarily managed through operations, with no financial instruments used for hedging[46] - The company's bank loans increased to HKD 202.677 million as of June 30, 2024, secured by land, buildings, and machinery[49] - The company's outstanding capital commitments decreased to HKD 161 million as of June 30, 2024, down from HKD 346 million at the end of 2023[49] - Total assets as of June 30, 2024, increased to HKD 8,572,255 thousand, up 5.9% from HKD 8,097,225 thousand as of December 31, 2023[131] - Cash and cash equivalents as of June 30, 2024, decreased to HKD 3,074,364 thousand, down 12.2% from HKD 3,500,760 thousand as of December 31, 2023[131] - Total equity attributable to shareholders as of June 30, 2024, was HKD 4,357,429 thousand, up 0.1% from HKD 4,353,595 thousand as of December 31, 2023[131] - Total equity increased to HK$4,416.822 million as of June 30, 2024, up from HK$4,409.711 million at the beginning of the year[135] - Cash flow from operating activities improved significantly to HK$794.963 million, compared to a negative HK$380.197 million in the same period last year[138] - Net cash used in investing activities increased to HK$1,176.791 million, primarily due to purchases of property, plant, and equipment (HK$436.052 million) and other financial assets (HK$472.154 million)[138] - Cash and cash equivalents decreased by HK$410.638 million, ending at HK$3,074.364 million as of June 30, 2024[138] - Bank loans received amounted to HK$221.64 million, while repayments of bank loans totaled HK$229.708 million[138] - The company paid HK$149.66 million in dividends approved from the previous year[135] - Other comprehensive loss for the period was HK$23.776 million, mainly due to exchange rate fluctuations[135] - The company repurchased shares worth HK$4.731 million under the share incentive plan[135] - Interest received during the period was HK$58.957 million, an increase from HK$46.873 million in the previous year[138] - Cash and cash equivalents decreased to HK$3.07 billion as of June 30, 2024, compared to HK$3.50 billion as of December 31, 2023[160] - Restricted bank deposits decreased to HK$41.6 million as of June 30, 2024, from HK$55.9 million as of December 31, 2023[160] - No share option plan was active during H1 2024, following the expiration of the previous plan in June 2023[163] - Trade receivables and notes are generally due within 60 to 90 days from the invoice date[158] Business Strategy and Market Position - The company is a global leader in automotive TFT display products and medium-to-large display module markets[4] - The company aims to become a leading provider of automotive smart cockpit display assembly solutions[4] - The company's revenue growth was primarily driven by the sales increase in TFT modules, touch screen display modules, and automotive system products, benefiting from the significant growth in new energy vehicles and new production capacity[13] - TFT modules and touch screen display modules accounted for approximately 93% of the company's revenue, while monochrome display revenue decreased during the period[13] - The automotive display business generated revenue of 5,752,000,000 HKD, a 24% increase compared to 4,646,000,000 HKD in the same period last year, accounting for 93% of the company's total revenue[15] - The industrial display business recorded revenue of 406,000,000 HKD, a 28% decrease compared to 564,000,000 HKD in the same period last year, accounting for 7% of the company's total revenue[17] - The company's overseas revenue remained stable, with positive growth in the US due to strategic investments in R&D and enhanced customer service capabilities[16] - The company established a new office in Nagoya, Japan, which contributed to significant revenue growth in the region[16] - The company implemented comprehensive quality control measures, including the establishment of a Quality Management Committee (QCC) in 2024, to enhance quality management and win more customer trust[16] - The Chengdu facility, established at the end of 2022, is leveraging advanced production equipment to meet market demand and improve operational efficiency for the automotive display business[16] - The company is focusing on improving production, R&D, and customer service capabilities to support rapid business growth[22] - LCD remains the primary solution due to its cost competitiveness compared to OLED, with advanced technologies expected to be applied in the future[23] - The company plans to leverage its major shareholder's new 8.6-generation OLED production line in Chengdu to enhance competitiveness[23] - The automotive market is rapidly consolidating around top new energy vehicle manufacturers, expected to create additional revenue and profit opportunities[23] - The company is exploring the establishment of overseas production facilities to meet diverse customer needs, with capital expenditures to be gradually invested based on order volumes[23] - The company is focusing on expanding its automotive display business and maintaining its leading position, with a clear short-term and long-term strategy, including the "Three-Step Development Strategy" to consolidate its automotive display equipment business and explore opportunities in smart cockpit solutions[26] - The company has successfully developed and mass-produced a 14.6-inch QHD Oxide display product, and showcased a 45-inch 9K ultra-large Oxide cockpit screen at SID 2024, with several other Oxide display products under development[32] - The company's "HERO" plan, targeting smart automotive applications, includes health, entertainment, relaxation, and office scenarios, aiming to integrate more innovative products and solutions into vehicle designs[28] - The company has made significant progress in enhancing internal competitiveness and ensuring sufficient cash and resource reserves to support rapid expansion, while maintaining a light-asset model by leveraging existing production capacities of BOE Technology Group[26] - The company is committed to sustainability, with goals to reduce carbon emissions, energy and water consumption, and waste by 2025, and aims to achieve carbon neutrality by 2050[26] - The company's ADS-Pro technology, which combines Mini LED, BD Cell, high refresh rate, high resolution, and high color gamut, has gained recognition from major automotive manufacturers[33] - The company has developed f-OLED technology, with several automotive f-OLED displays already in mass production, and is working on Tandem OLED technology for higher efficiency and longer lifespan[34] - The company has overcome challenges in curved display solutions, with a dual 12.3-inch curved (R3000) cockpit display module already in mass production[35] - The company has developed a ~5K ultra-high-definition display with naked-eye 3D capabilities, integrated into driver monitoring systems for immersive 3D display interfaces[35] - The company is collaborating with global partners to create more smart cockpit experiences, leveraging its deep technical expertise and innovation in the automotive industry[28] - The company completed the development of a CMS system, becoming the first in China to pass the GB15084 national standard test for Class III indirect vision devices[40] - The company is developing a switchable 2D&3D technology for automotive displays, expected to be evaluated and promoted in Q4 2024[38] - The company has developed a new AR-HUD system using a 3.6-inch LCD PGU and LCoS technology, with 34 patents applied[38] - The company is advancing directional sound technology, integrating it with displays for applications in automotive, business, and entertainment scenarios[39] - The company has developed a BVP (BOE Vision Plus) image enhancement technology, improving image clarity and detail using a dedicated image processing chip[40] - The company is preparing for mass production of a rotating structure assembly for rear ceiling and seatback screen projects[40] - The company has established a dividend policy with a payout ratio of no less than 30%, subject to profitability and financial conditions[41] - R&D expenses for the period were HKD 138,000,000, accounting for 2% of the company's revenue, maintaining a stable ratio[42] - Total equity as of June 30, 2024, was HKD 4,417,000,000, with a current ratio of 1.49, down from 1.61 at the end of 2023[42] - The company's liquidity investment portfolio increased to HKD 3,944,000,000, with cash and term deposits totaling HKD 3,496,000,000[43] - Inventory turnover ratio improved to 6 times, up from 5 times at the end of 2023, reflecting better inventory management[43] - Cash flow from operating activities was HKD 795,000,000, compared to a cash outflow of HKD 380,000,000 in 2023[46] - Net cash used in investing activities was HKD

Investment Rating - The report maintains a "Buy" rating for the company [1] Core Viewpoints - The company has solidified its leading position in the global automotive display market, with significant growth in overseas markets and Tier 1 business [1] - Revenue for 1H24 reached HKD 6.157 billion, an 18% YoY increase, driven by strong domestic customer orders and overseas market expansion [1] - Automotive display revenue grew 24% YoY to HKD 5.752 billion, while industrial display revenue declined 28% YoY to HKD 406 million [1] - Net profit attributable to shareholders decreased by 15% YoY to HKD 172.1 million, with a net profit margin of 2.79% [1] - The company's global market share in automotive TFT displays increased to 17.6%, with a 21.1% share in large and medium-sized (≥8 inch) displays [1] - OLED product revenue doubled in 1H24, and LTPS products saw a 15%+ market share increase in China [1] - The company's gross margin improved from 9.1% in 1H23 to 11.4% in 1H24, driven by increased capacity utilization at the Chengdu base [1] - The company is accelerating its overseas business, with double-digit growth in revenue and ASP in overseas markets, and securing orders from international brands like Toyota and Hyundai [1] - The company has established a new overseas intelligent automotive solutions BG and is building a production base in Vietnam, expected to be operational by 2025 [1] Financial Performance - Revenue for 2024E is projected at HKD 12.411 billion, with a 15.3% YoY growth [2] - Net profit attributable to shareholders for 2024E is forecasted at HKD 388 million, a 31.1% YoY increase [2] - EPS for 2024E is estimated at HKD 0.49, with a P/E ratio of 9 [2] - The company's total assets are expected to reach HKD 9.567 billion in 2024E, with total liabilities at HKD 4.906 billion [5] - Operating cash flow for 2024E is projected at HKD 1.463 billion, with free cash flow at HKD 974 million [6] Market Data - The company's total market capitalization is HKD 3.388 billion, with a total share capital of 792 million shares [3] - The stock price range over the past year was HKD 4.02 to HKD 8.74 [3] - The 3-month turnover rate is 15.3% [3] Industry and Company Outlook - The company is expected to benefit from the easing of price wars among domestic automakers, with product price pressures likely to ease in 2H24 [1] - The company's Tier 1 business and overseas operations are expected to continue driving growth, supported by its parent company BOE Group's technological and cost advantages [1] - The company's long-term development logic remains clear, with potential for further profitability improvement as new production lines ramp up [1]

Financial Performance - The company reported revenue of HKD 6,157 million for the six months ended June 30, 2024, an increase of 18% compared to HKD 5,210 million for the same period in 2023[3]. - EBITDA for the same period was HKD 315 million, a decrease of 3% from HKD 324 million in the previous year, resulting in an EBITDA margin of approximately 5.1%[5]. - Shareholders' profit attributable to the company was HKD 172.1 million, down 15% from HKD 202.5 million in the prior year[3]. - Total revenue for the six months ended June 30, 2024, was HKD 6,157,319, representing a 18.2% increase from HKD 5,210,217 for the same period in 2023[40]. - Operating profit decreased to HKD 193,651, down 19.6% from HKD 240,842 in the prior year[40]. - Net profit for the period was HKD 175,377, a decrease of 13.2% compared to HKD 202,043 in the same period last year[41]. - Basic earnings per share decreased to 21.9 cents from 25.8 cents year-on-year[40]. - Total comprehensive income for the period was HKD 151,601, compared to HKD 137,155 in the previous year, reflecting an increase of 10.5%[42]. Cash and Liabilities - The company maintained a strong cash position with total cash resources of HKD 3,944 million as of June 30, 2024, up from HKD 3,572 million at the end of 2023[4]. - The company has reduced bank loans to HKD 607 million, down 2% from HKD 620 million at the end of 2023, with HKD 432 million classified as long-term loans[4]. - Total liabilities increased to HKD 5,753,095 from HKD 5,022,791, reflecting a rise in financial obligations[44]. - The company's equity increased slightly to HKD 4,416,822 from HKD 4,409,711, indicating stable financial health[44]. - The group’s bank loan balance as of June 30, 2024, was HKD 607,000,000, slightly down from HKD 620,000,000 as of December 31, 2023[72]. Revenue by Region - Revenue in China reached HKD 4,666,000,000, an increase of approximately 26% compared to the same period in 2023, accounting for 76% of total revenue[33]. - Revenue in Europe decreased by approximately 13% to HKD 667,000,000, representing about 11% of total revenue, impacted by geopolitical conflicts and economic downturns[34]. - Revenue in the Americas increased by approximately 25% to HKD 440,000,000, contributing about 7% to total revenue, driven by strategic investments in R&D and enhanced customer service[35]. - Revenue in South Korea decreased by approximately 10% to HKD 153,000,000, accounting for about 2% of total revenue, primarily due to reduced marketing efforts by customers[36]. - Revenue in Japan increased by approximately 13% to HKD 40,000,000, representing about 1% of total revenue, attributed to successful project production and advanced product technology development[37]. Business Segments - The automotive display business generated revenue of HKD 5,752 million, a 24% increase from HKD 4,646 million in the same period last year, accounting for approximately 93% of total revenue[7]. - The industrial display business recorded revenue of HKD 406 million, a decrease of approximately 28% compared to HKD 564 million in the same period of 2023, accounting for about 7% of the group's total revenue[10]. Strategic Initiatives - The company is focusing on enhancing quality management through the establishment of a Quality Management Committee (QCC) to ensure consistent supplier performance monitoring[8]. - The company plans to continue exploring new applications in the automotive sector to drive additional growth[7]. - The company plans to enhance production, R&D, and customer service capabilities while exploring the need for overseas production facilities to meet diverse customer demands[15]. - The company is focused on expanding its automotive display business and has established a clear short-term and long-term strategic goal to maintain its leading position in the market[17]. - The company is actively exploring new automotive applications for its products, including agricultural vehicles, to drive future growth[35]. Technology and Innovation - The company launched the "HERO" plan in 2023, focusing on creating diverse smart cockpit experiences, including health, entertainment, relaxation, and office scenarios[19]. - The company has successfully mass-produced a dual 12.3-inch curved display module, overcoming challenges related to automotive reliability and mechanical durability[24]. - The company is actively developing a new far-field light field display technology to enhance in-car entertainment experiences by providing a large screen display with reduced visual fatigue[27]. - The company is working on a switchable privacy display technology (POD) to enhance driver safety and prevent distractions from passenger displays, with evaluations expected to complete in Q4 2024[29]. Market Trends - The global automotive display module market is projected to have a compound annual growth rate (CAGR) of 4.34% over the next three years, with larger displays (8 inches and above) expected to grow at 7.98% and oxide and LTPS displays at 20.40%[14]. - The automotive display market is experiencing significant growth, driven by the demand for smart cockpit applications, with increased adoption of next-generation displays in various scenarios[19]. - The geopolitical tensions and high inflation have created challenges for the global economy, impacting consumer demand for automobiles, particularly in Europe and the U.S.[11]. Corporate Governance - The company has adopted a code of conduct for securities trading by employees, revised on July 24, 2024, which meets or exceeds the standards set by the listing rules[78]. - The audit committee is responsible for reviewing the financial information of the group and ensuring effective internal controls and risk management systems[78]. - The investment committee is tasked with identifying and selecting suitable investment projects to enhance and transform the group's strategy[81]. - The company has complied with the corporate governance code as per the listing rules as of June 30, 2024[76].

Investment Rating - The report maintains a "BUY" rating for BOE Varitronix, with a target price of HK$9.9, indicating a potential upside of 121% from the current price of HK$4.47 [12][11][5]. Core Insights - The company is expected to report a 15% year-on-year revenue growth in 1H24, driven by high-end displays, overseas client orders, and the ramp-up of the Chengdu plant. However, net profit is projected to decline by 16% year-on-year [2][11]. - For 2H24, revenue and net profit are anticipated to improve due to order seasonality, a better product mix, and rising utilization rates [2][11]. - The report highlights BOE Varitronix's leadership in the global auto display market, with expectations for ASP and margin recovery in the second half of the year [2][11]. Financial Summary - Revenue is projected to grow from HK$10,760 million in 2023 to HK$12,873 million in 2024, and further to HK$15,561 million in 2025, reflecting a compound annual growth rate [14]. - Net profit is expected to recover from HK$401 million in 2024 to HK$519 million in 2025, and HK$623 million in 2026 [14]. - The operating margin is forecasted to improve slightly from 3.9% in 2024 to 4.0% in 2025 and 4.2% in 2026 [14]. Market Position and Strategy - BOE Varitronix remains the global number one auto display supplier in terms of total and medium- to large-size shipments as of 2Q24 [2]. - The company is focusing on expanding its overseas market presence, with a target for overseas sales to reach 50% by FY26E [2][11]. - The Chengdu plant is noted as the world's largest and most advanced auto display module facility, currently operating at full capacity, which is expected to enhance profitability in 2H24 [2][11].