CITIC SEC: Panel demand remains strong in off-peak season, 25M1 is expected to expand momentum.

CITIC SEC released a research report stating that in the short term, subsidies from the government, overseas promotions, and low-level stockpiling are driving the demand for stockpiling. It is expected that in January 2025, TV panel prices will continue to rise further after a slight increase in December 2024, while panel factories will maintain high operating rates, potentially bringing certain profit elasticity. Looking ahead, the firm believes in the medium to long-term logic of the panel industry, as the trend towards larger sizes promotes a balance between supply and demand, the competitive landscape improves, domestic production costs continue to decrease, and top panel companies are expected to accelerate profit growth as depreciation gradually exits. Key points from CITIC SEC are as follows: Price situation: 1) Large size panels: Prices are expected to continue to rise in January 2025 According to Omdia data and forecasts, the prices of TV panels in December 2024 for 32/43/50/55/65 inches were $36/$62/$101/$126/$173 per piece. The price of 65-inch panels increased by $1 per piece (+0.6%) month-on-month, while the rest remained stable. It is predicted that in January 2025, prices will increase by $1/$1/$1/$2/$3 per piece (+2.8%/+1.6%/+1.0%/+1.6%/+1.7%). 2) Medium size panels: Overall stable - Monitor: Prices for 21.5 (IPS)/21.5 (VA)/23.8 (WVA)/27 (WVA) inch panels in December 2024 were $42.2/$35.5/$44.1/$56.3 per piece, with prices remaining stable. It is expected that prices will remain stable in January 2025. - NB (Notebook): Prices for 13.3 (IPS)/14/15.6/15.6 (IPS) inch panels in December 2024 were $57.4/$26.2/$26.2/$37.4 per piece, with prices remaining stable. It is predicted that prices for 13.3-inch panels will decrease by $0.1 per piece (-0.2%) in January 2025, while the rest remain stable. - Tablet: Prices for 7/10.1 inch panels in December 2024 were $7.8/$16.4 per piece, with prices remaining stable. It is expected that prices will continue to be stable in January 2025. 3) Small size panels: Overall stable - Mobile phone: Prices for 6.52 (A-Si)/6.7 (LTPS)/6.67 (OLED)/6.8 (OLED) inch panels in December 2024 were $7.3/$10/$21/$24 per piece, with prices remaining stable. It is predicted that prices will continue to remain stable in January 2025. Shipment situation: Month-on-month growth trend According to Witsview data and forecasts, in November 2024, global shipments of TV/monitor/NB/tablet panels were 20.8/12.3/20.0/22.4 million pieces, with month-on-month increases of +7%/+9%/+40%/+13%. Shipped area situation: Further expansion of growth compared with shipment volume According to Witsview data and forecasts, in November 2024, global shipments of TV/monitor/NB/tablet panels were 1571/231/130/66 million square meters, with month-on-month increases of +9%/+10%/+40%/+17%. Whole machine price situation: Mid-to-high end prices are rising, while low-end prices are declining According to AVC data and forecasts, in December 2024, the average online prices for domestic 32/43/50/55/65/75 inch TVs were 668/990/1505/1893/2988/4351 yuan, with month-on-month changes of -0.4%/-0.2%/0.7%/+0.6%/+0.2%/-0.3%. It is expected that a similar trend will continue in January 2025. Risk factors: International macroeconomic and political fluctuations; weakened downstream demand; panel price increases below expectations; intense industry competition; risks of technological innovation, international trade friction, and potential overseas tariff risks.