CITIC SEC: Panel demand remains strong in the off-season, with a possible continuation of price increases for 25M2.

CITIC SEC released a research report stating that in the short term, demand for panel procurement is expected to be driven by factors such as national subsidies, low inventory levels, and expectations/impacts of tariffs. In February 2025, TV panel prices are expected to continue to rise, with panel manufacturers maintaining high levels of production, which is expected to bring about certain profit elasticity. At the same time, the industry's tight supply and demand balance is expected to be transmitted to components such as polarizers. Looking ahead, CITIC SEC remains optimistic about the medium to long-term prospects of the panel industry. The trend towards larger sizes is pushing towards a continuous balance of supply and demand, with a favorable competitive landscape, ongoing domestic cost reduction and gradual elimination of depreciation, leading to accelerated profit release for top panel manufacturers. Key points from CITIC SEC's report: Price situation: 1) Large size panels: Prices are expected to continue to rise in February 2025 - TV: Based on Omdia data and forecasts, in January 2025, the prices for TV panels of 32/43/50/55/65 inches were $37/63/102/128/175 per panel, with a month-on-month increase of +1/+1/+1/+2/+2 USD per panel. It is expected that in February 2025, the month-on-month change will be +1/+1/+1/+1/+2 USD per panel (+2.7/+1.6/+1.0/+0.8/+1.1%), maintaining a stable increase. 2) Medium size panels: Prices are overall stable - Monitor: According to Omdia data and forecasts, in January 2025, prices for 21.5 (IPS)/21.5 (VA)/23.8 (WVA)/27 (WVA) inch panels were $42.2/35.5/44.1/56.3 per panel, remaining stable month-on-month, and are expected to continue to be stable in February 2025. - NB (Notebook): According to Omdia data and forecasts, in January 2025, prices for NB panels of 13.3 (IPS)/14/15.6/15.6 (IPS) inches were $57.4/26.2/26.2/37.4 per panel, remaining stable month-on-month, and are expected to continue to be stable in February 2025. - Tablet: According to Omdia data and forecasts, in January 2025, prices for 7/10.1 inch panels were $7.8/16.4 per panel, remaining stable month-on-month, and are expected to continue to be stable in February 2025. 3) Small size panels: Prices are overall stable - Phone: According to Omdia data and forecasts, in January 2025, prices for 6.52 (A-Si)/6.7 (LTPS)/6.67 (OLED)/6.8 (OLED) inch panels were $7.3/10/21/24 per panel, remaining stable month-on-month, and are expected to continue to be stable in February 2025. Shipment situation: TV/Monitor increase month-on-month According to Witsview data and forecasts, in December 2024, global shipments of TV/Monitor/NB/Tablet panels were 21.3/14.4/18.4/20.9 million panels, with a month-on-month increase of +3/+17/-8/-7%. Shipment area situation: Significant increase in Monitor shipments According to Witsview data and forecasts, in December 2024, global shipments of TV/Monitor/NB/Tablet panels were 1531/273/115/65 million square meters, with a month-on-month change of -3/+18/-11/-2%. Utilization rate: Maintaining relatively high levels According to Omdia data and forecasts, in December 2024, the LCD industry's utilization rate was around 81%, and it is expected to be 81%/80%/79% in January/February/March 2025, remaining relatively high. Overall machine price situation: Stable in the mid-to-high-end, trend of decline in the low-end According to AVC data and forecasts, in January 2025, the average prices for domestic 32/43/50/55/65/75 inch TVs were 652/986/1490/1891/2992/4344 RMB, with month-on-month changes of -2.4/-0.4/-1.0/-0.1/+0.1/-0.2%, and are expected to remain stable overall in February 2025. Risk factors: International macroeconomic/political/economic fluctuations; weakening downstream demand; panel price increases below expectations; intense industry competition; risks of technological innovation; risks of international trade friction; potential overseas tariff risks.