1. Report's Industry Investment Rating The provided content does not mention the industry investment rating. 2. Core Viewpoints of the Report - Since 2024, the panel industry has entered a new upward cycle. The demand for high - end consumer electronics is the medium - to - long - term core driver for the industry's upward movement from 2026 - 2028, but the uncertainty of national subsidy policies may lead to demand fluctuations. - High - end panel production capacity is expanding rapidly, while low - end capacity remains stable, and panel prices are relatively stable. - Leading enterprises are expected to maintain stable profits and reduce leverage through demand recovery, technological iteration, and production control. In contrast, most small and medium - sized manufacturers have high leverage, low profitability due to the squeeze from leading enterprises, and some may be eliminated [1]. 3. Summary by Relevant Catalogs 3.1 Introduction - In the past few decades, the panel manufacturing industry has shifted to China. In 2024, the share of mainland China's LCD panels exceeded 70%. The industry's production capacity structure has been optimized, and high - end panel products have strong downstream demand. The future panel industry will feature multiple technological paths such as LCD, OLED, and Mini - LED [4]. 3.2 Panel Industry Cycle and Key Factors Affecting Credit Risk 3.2.1 Panel Industry Cycle - Since 2012, the panel industry has experienced three complete cycles and entered the fourth upward cycle since 2024. The industry is highly cyclical, with supply - demand changes, technological iteration, and competition pattern changes running through its development. In the upward phase, supply - demand and corporate performance improve; in the downward phase, there is over - supply, price decline, and an increase in the number of loss - making enterprises [5]. - **First cycle**: The upward phase was from September 2014 to June 2015, with growing LCD demand and rising prices. The downward phase was from July 2015 to August 2016, with over - supply due to the concentrated launch of LCD 8.5 - generation production lines and falling prices [6]. - **Second cycle**: The upward phase was from September 2016 to November 2017, driven by the demand for large - size LCD TVs and mobile phone OLED screens, and the contraction of Korean enterprises' LCD capacity. The downward phase was from December 2017 to December 2019, with over - supply due to the concentrated launch of high - generation LCD production lines and falling prices [6]. - **Third cycle**: The upward phase was from April 2020 to July 2021, due to the "stay - at - home economy" during the pandemic and the exit of Korean enterprises from the LCD field. The downward phase was from August 2021 to October 2022, with the decline of the "stay - at - home economy" and over - supply. The adjustment phase was from November 2022 to the end of 2023, with panel manufacturers controlling production and prices starting to rise in March 2023 [6][7]. - **Fourth cycle**: Since 2024, the upward cycle has been driven by the "trade - in" policy, with the demand for medium - sized OLED applications in vehicles and tablets continuously released. Leading panel manufacturers control production, and panel prices are stable [11]. 3.2.2 Core Factors Affecting Panel Industry Credit Risk - **Supply - demand situation**: Supply - demand changes cause panel price fluctuations, affecting corporate revenue, cash flow, and solvency. In the upward cycle, demand is strong, prices rise, and credit risk is low; in the downward cycle, over - supply leads to price drops and increased credit risk [12]. - **Technological iteration**: It helps reduce production costs and improve efficiency but also accelerates the elimination of old - technology production lines. Enterprises that fail to keep up with technological trends face product backlogs and increased credit risk [13]. - **Market competition**: In the upward cycle, competition is mild, and credit risk is controllable. In the downward cycle, leading enterprises squeeze the living space of small and medium - sized manufacturers, increasing their credit risk [15]. - **Financial leverage and profitability**: The panel industry is capital - intensive, and enterprises rely on debt financing for expansion, leading to high asset - liability ratios. In the upward cycle, profitability is strong, and credit risk is low; in the downward cycle, over - supply and high debt pressure increase credit risk [16]. 3.3 Changes in Credit Risk Factors in the Current Upward Cycle (2024 - present) 3.3.1 Supply - demand Situation - In the current upward cycle, panel demand is driven by the demand upgrade of consumer electronics and the national "trade - in" policy. The overall supply - demand is in a tight balance, with stable low - end capacity and rapidly expanding high - end capacity. Panel prices are basically stable [17]. - In 2024, the global display panel market size reached 1.3 trillion yuan, a 9.41% increase from the previous year, and is predicted to reach 1.4 trillion yuan in 2025. The average size of global LCD TV panels increased to 51.4 inches, the sales of Mini - LED TVs increased by 490.6%, the shipment of tablets increased by 9.2%, the shipment of monitors increased by 1.5%, and the shipment of smartphone display panels increased by 7%, with the shipment of OLED smartphones increasing by 26% [17][18][19]. - The government has issued a series of policies to support the development of the panel industry, including promoting technological research and expanding the scope of "trade - in" subsidies [20][21]. - In the future, high - end panel supply may face over - capacity risks after 2028 if new production capacity continues to be launched and demand growth is lower than expected [23]. - Panel prices are expected to start a general decline in November 2025, with mainstream - size panel prices expected to drop by $2 and larger - size panels having a more significant decline [24][26]. 3.3.2 Technological Iteration - The global display panel market shows a diversified development of technological routes. LCD dominates the low - to - mid - end market, OLED penetrates the mid - to - high - end market, Mini - LED fills the gap between them, and Micro LED has not been commercialized [28]. - In 2024, the market share of TFT - LCD was 56.25%, and that of OLED was 14.51%. In 2025, the demand for OLED panels in mobile phones and mid - sized IT products increased [31]. - Mini - LED has the advantages of long life and low cost, and its TV shipments exceeded those of OLED in 2025. Micro LED has excellent performance but is limited by high cost and technical bottlenecks [33]. 3.3.3 Market Competition - The panel industry is mainly dominated by Korean and Chinese enterprises, with a stable and highly concentrated competition pattern. Chinese enterprises have the right to speak in the LCD field, Korean manufacturers dominate the OLED field, and the competition situation between Chinese and Korean enterprises in the Mini - LED field varies in different industrial chain links [34]. - In the LCD field, mainland China's capacity accounted for 72.7% in 2024, and the concentration is increasing. In the OLED field, Korean manufacturers still have an advantage, while Chinese enterprises are making technological breakthroughs. In the Mini - LED field, Chinese and Korean enterprises are competing, and Chinese enterprises have achieved a breakthrough in the upstream of the industrial chain [34][35][36]. 3.3.4 Financial Leverage and Profitability - In the current upward cycle, panel enterprises' financial leverage remains high, with leading enterprises' total debt - to - capital ratio at around 50% and mid - to - tail enterprises' exceeding 60%. Profitability has improved through production control and price stabilization, but the gross profit margin is still low [38]. - In the first half of 2025, 4 out of 8 mainland Chinese panel enterprises achieved profitability. The gross profit margins of leading enterprises are between 13% - 16%, while those of mid - to - tail enterprises are below 7% or even negative [40][42]. - The new OLED 8.6 - generation production lines under construction by some enterprises will drag down their profitability in the short term but will have cost advantages in the long term, squeezing the profit space of non - layout enterprises [44]. 3.4 Summary and Outlook of Panel Industry Credit Risk in the Current Upward Cycle - The demand for high - end consumer electronics is the medium - to - long - term core driver for the industry's upward movement, but the uncertainty of national subsidy policies may lead to demand fluctuations [45]. - Low - end panel capacity is stable, and high - end capacity is expanding rapidly. High - end panels are expected to achieve supply - demand balance from 2026 - 2028, but there may be over - capacity risks after 2028 [45]. - The panel industry will present a multi - technology parallel pattern for a long time. LCD will maintain its mainstream position, OLED will penetrate the mid - to - high - end market, Mini - LED will fill the high - end niche market, and Micro LED will be difficult to become the mainstream in the short term [46]. - In the current upward cycle, Chinese enterprises monopolize the LCD market, and the concentration will continue to increase. The years from 2026 - 2028 will be crucial for the competition between Chinese and Korean high - generation OLED production lines. Chinese enterprises will expand their leading edge in the Mini - LED field [47]. - The financial leverage shows a differentiated trend. Leading enterprises will gradually reduce leverage, while most mid - to - tail enterprises have high leverage and high risks [48]. - The profitability is concentrated in leading enterprises. Leading enterprises' profitability will continue to increase, while mid - to - tail enterprises' profitability is low, and some may be eliminated [48][49].

Core Viewpoint - The upcoming release of Garmin's Fenix 8 Pro and Fenix 8 Pro Micro LED smartwatches is expected to drive advancements in Micro LED technology, positioning it as a strong competitor to AMOLED in the smartwatch market [4][10][15]. Summary by Sections Product Launch and Features - Garmin is set to launch the Fenix 8 Pro Micro LED smartwatch, which is anticipated to be the brightest smartwatch available, with a larger 51mm version expected to be priced above $1200, potentially nearing $2000 [4][6][10]. Micro LED Technology Advantages - Micro LED technology offers significant advantages over AMOLED, including higher brightness, lower power consumption, and improved resolution and contrast, addressing the limitations of AMOLED such as visibility in bright outdoor conditions and screen burn-in risks [10][11]. Industry Development and Challenges - Despite the promising features of Micro LED, the development of Micro LED smartwatches has faced challenges. Apple previously invested heavily in Micro LED technology for its Apple Watch but suspended the project due to high production costs and technical difficulties [11][15]. - Other brands, like TAG Heuer, are exploring Micro LED for luxury experiences, with production expected to begin in 2024 [11][12]. Supply Chain and Production - The upstream panel industry is actively working on Micro LED technology, with AU Optronics set to mass-produce Micro LED panels by the end of 2023. Samsung Display has also made advancements, increasing the brightness of Micro LED screens to 6000 nits [12][13]. - Companies like Rara Technology and Innolux are developing Micro LED panels with high resolution and energy efficiency, indicating a growing interest in this technology [13][12]. Market Outlook - The Micro LED smartwatch market is still in its early stages, but there is optimism for growth as brands begin to adopt this technology in high-end products, potentially leading to broader market acceptance and technological advancements [15].

Group 1 - The car display industry is experiencing rapid growth driven by the transformation of the automotive sector, particularly with the rise of electric and smart vehicles, leading to an expected shipment of 230 million car display panels globally in 2024, a year-on-year increase of 8.5%, and a projected 5.4% growth to 250 million panels in 2025 [1] - The demand for larger and multiple displays in vehicles is increasing, with new products like HUDs and co-driver screens emerging to meet consumer needs, significantly boosting the installation rates of car displays [1] - The performance of electric vehicles is particularly notable, with models like Xiaomi SU7 and Zeekr 007 featuring large, high-resolution displays to enhance user experience, further stimulating market demand for car displays [1] Group 2 - While LCD technology remains dominant in the car display panel market, emerging technologies such as OLED, Mini LED, and Micro LED are gaining traction, with OLED expected to increase its market share due to its advantages like self-lighting and high contrast [2] - Mini LED technology combines the strengths of traditional LED and OLED, offering high brightness and energy efficiency, while Micro LED is viewed as a revolutionary future direction for car displays due to its superior performance in brightness, contrast, and lifespan [2] - Other innovative display technologies, such as holographic displays and near-field projection, are also being explored, indicating a shift towards more interactive and advanced display solutions in vehicles [2] Group 3 - The traditional supply chain in car displays involves panel manufacturers, module manufacturers, system integrators, and automakers, but the increasing demands for display technology are fostering closer collaborations between automakers and panel manufacturers [3] - This direct cooperation is expected to enhance technical capabilities, improve production efficiency, and reduce costs, thereby driving technological advancements and industry upgrades in the car display sector [3]