CINNO Research: The seamless connection of the "national subsidy" policy in January 2025 may continue to drive slight price increases for panels 65 inches and above.

CINNO Research chief analyst Charley Zhou Hua commented that in December of this year, a series of factors such as "Double Twelve", "Black Friday", and the long-term "national subsidy" policy have maintained strong short-term demand in the domestic and international markets. Although panel factories have increased production to cope, the demand for large-size panels remains strong, leading to a slight increase in prices for mainstream sizes of 65 inches and above. As we enter January of this year, the seamless continuation of the "national subsidy" policy until 2025 may continue to drive prices of 65-inch and above panels to rise slightly. In December 2024, domestic and international promotional festivals and domestic "trade-in" activities continued, keeping market demand at high levels. Under the "national subsidy" policy, the demand for large-size TVs is particularly strong, leading to a slight increase in prices for mainstream sizes of 65 inches and above, while prices for other sizes of panels stabilize. The "national subsidy" policy for 2025 will be implemented in January of this year, further boosting consumer confidence. On the demand side, traditional shopping events such as "Double Twelve", "Black Friday", and Thanksgiving, combined with the "national subsidy" policy, have led to a hot sale of household appliances in the market. In a special conference on December 20th, the Ministry of Commerce pointed out that the retail sales of household appliances above the quota in November increased by more than 20% year-on-year, significantly higher than the growth rate of other retail products. Low-priced, low-threshold, and high ownership rate household appliances are the most beneficial varieties in the "trade-in" activities of 2024. From a policy perspective, the National Development and Reform Commission and the Ministry of Finance have issued relevant notices and regulations for the new round of national subsidy policies. The activity will take place from January 1, 2025 to December 31, 2025, with subsidy methods and amounts for TV products continued from the 2024 plan. The release of this policy is conducive to stimulating market vitality and maintaining the recovery of domestic demand for household appliances. On the supply side of panels, in the fourth quarter of last year, short-term demand rebounded, and panel factories increased production to cope with concentrated orders. As a result, the average capacity utilization of high-generation production lines in China has increased to over 80% since October last year. Thanks to a significant reduction in promotional projects by panel factories, prices for mainstream sizes of 65 inches and above rose slightly in December last year. As we enter January of this year, considering that some panel factories have completed maintenance during the two holiday periods last year, and with an increase in orders and rising panel prices, panel factories may shorten their Chinese New Year holiday time to maintain a high capacity utilization rate of 80% to 85%. In terms of sales strategies of major brands during the peak season, in addition to offering multiple subsidies and discounts, new product promotion has also become an important marketing strategy. Following the release of multiple models in the second half of last year, TCL introduced several new models covering the high, middle, and low-end mainstream markets in December of last year. The focus was on new models of 65 inches and above in size, with Mini LED TVs, which offer a slightly higher brightness parameter, becoming the preferred choice for mainstream consumers due to their high cost-effectiveness and low partitioning. According to data from CINNO Research, in January of this year, it is estimated that the prices of mainstream panels in sizes of 32 inches to 55 inches will remain at the same level as December of last year under relatively balanced supply and demand conditions. On the other hand, the demand for popular large sizes of 65 inches, 75 inches, and 85 inches remains relatively strong, leading to a tightening supply and demand environment, resulting in a slight increase of 1 dollar compared to December last year, with prices rising to $168, $226, and $304 respectively.