BOE Technology_ Research Tactical Idea

Industry and Company * Industry: Greater China Technology Hardware * Company: BOE Technology (000725.SZ) Core Views and Arguments * TV Panel Prices Rising: TV panel prices have started to edge up from the second half of December, driven by strong panel pull-in momentum. This is earlier than the base case assumption by 2-3 months. * Positive Sentiment: With an upward trend for TV panel prices in the coming couple of quarters, sentiment toward panel stocks should turn more favorable and risk/reward should be skewed more to the upside. * Overweight Rating: Morgan Stanley maintains an Overweight rating on BOE Technology with a price target of Rmb5.5 (1.5x 2025 P/B). * Valuation: The target multiple of ~1.5x 2025e P/B is considered reasonable vs. BOE's average of 1.3-1.4x P/B since 2015, given the estimated ROE of 5-7% over 2024-25. * Risks: Risks to the downside include better-than-expected industry-wide ASP and lower yield in G10.5 fab. Risks to the upside include higher yield in G10.5 fab and faster-than-expected AMOLED ramp. Other Important Points * Relative Rating System: Morgan Stanley uses a relative rating system using terms such as Overweight, Equal-weight, Not-Rated or Underweight. * Global Stock Ratings Distribution: As of November 30, 2024, the distribution of stock ratings is 38% Overweight/Buy, 46% Equal-weight/Hold, 16% Underweight/Sell. * Analyst Stock Ratings: Overweight (O), Equal-weight (E), Not-Rated (NR), Underweight (U). * Analyst Industry Views: Attractive (A), In-Line (I), Cautious (C). * Stock Price and Price Target: The stock price as of December 20, 2024, is Rmb4.39, with a price target of Rmb5.50. * Market Cap: The current market cap is Rmb167,682.0 million. * EV: The current enterprise value is Rmb291,820.2 million. * Average Daily Trading Value: The average daily trading value is Rmb1,759 million.