After 25 years of ventures, BOE A (5.79-2.69%, a diagnostic company) has finally become the world leader in the panel industry.
Last year, the company’s net profit is expected to reach 7.5 billion yuan to 7.8 billion yuan. Successfully out of the investment, the more losses, the more catastrophic the investment.
Now, the company is starting again.
On the evening of March 8, BOE A released three project announcements in a breath, total investment of 96.523 billion yuan, plus the panel business. This is the largest investment made on the same day since the company was founded.
According to public information, Wang Dongsheng, who is an accountant, took up the job and set up Beijing Dongfang Electronics (4.41-0.23%, medical stock) group to lead 2,600 employees.
For 25 years, BOE has been focusing on the panel business, frequently undergoing industrial layout through mergers and acquisitions and integration, and has finally grown into a leader in the panel industry.
According to incomplete statistics of the Changjiang Business Daily reporter, since 2010, BOE has implemented 11 mergers and acquisitions of a certain scale, with a total transaction price of 24.303 billion yuan. In the 14 years from 2000 to 2013, the company invested a total of 187.475 billion yuan.
In order to support the king of BOE, the company frequently raised funds. Wind data shows that as of the end of September last year, the company has accumulated 316.312 billion yuan in fund-raising. Among them, a total of 80.868 billion yuan was raised with 5 fixed additions and 1 issuance of bonds.
In addition, according to incomplete statistics, during the 10 years from 2007 to 2016, the company received a total of 7.33 billion yuan in government subsidies.
25 years of grinding a sword. In October of last year, the company’s first China and the world’s second flexible AMOLED production line was supplied in volume in Chengdu in advance. It successfully broke Samsung’s monopoly and made a solid step forward in the substitution of high-end displays in China.
At the same time, the company's profitability has also increased significantly. In the five years from 2007 to 2011, the company had deducted non-net profit for five consecutive years, and last year's net profit is expected to reach 7.5 billion yuan to 7.8 billion yuan, which almost filled the five-year loss.
One hundred billion investment projects to consolidate the industry leader
BOE A's investment in the panel area has increased substantially.
On the evening of March 8, BOE A issued three project announcements, all involving panel operations.
According to the announcement, one of the projects is that BOE intends to invest in the construction of a high-generation thin-film transistor liquid crystal display device (TFT-LCD) production line and supporting project in Wuhan City (high generation refers to the 10.5th generation line). The total investment of the project is 46 billion yuan. The other investor is the Industrial Development Investment Group of the Wuhan Airport Industrial Development Zone and the Yangtze River Economic Belt of Hubei Province.
According to BOE, the large screen size has become the future development trend. The company has taken the lead in building the 10.5-generation line, and has imported technologies such as self-developed Cu wiring to achieve large-scale applications. The timely follow-up of this project can better fill the gaps in the future market for large-size and ultra-large-size products, expand the market share in the TFT-LCD industry, establish a more solid preemptive competitive advantage, and consolidate the company’s position in the large-size display field. . At the same time, the semiconductor display industry has initially formed in the periphery of the Wuhan area. The company can further exert the pulling effect of the 10.5 generation line, introduce world-renowned key components and raw material manufacturers, strengthen industrial cooperation, expand the production line layout, and rapidly realize the development from quartz sand to The complete digital television industry chain for complete machine product manufacturing will play an industrial clustering effect and enhance the overall competitiveness of the company in TV panels.
Another project released by BOE at the same time is the construction of the sixth-generation AMOLED (flexible) production line project in Chongqing's Liangjiang New District. The main products are positioned as high-end AMOLED mobile phone displays and emerging mobile display products, with an investment of 46.5 billion yuan.
For this project, BOE believes that this project is another major strategic layout for the company in the field of AMOLED, and it is an important milestone in realizing the industrialization of AMOLED display devices. After the project is put into production, the company’s overall technology level will be further enhanced. High-value-added products such as full-screen mobile phones, vehicle-mounted and collapsible notebooks will be mass-produced one after another. This will not only increase the company’s market share in the medium and small-sized high-end displays, particularly in the field of flexible AMOLEDs, but also It will help improve the company’s overall competitiveness in the global semiconductor display industry, strengthen cooperation with domestic and foreign brand customers, expand greater market space and application areas, and play an important role in securing the initiative of the global semiconductor display industry and further enhancing the company’s profitability. .
The third project issued by BOE on the same day is the plan to build an industrial park project in Suzhou with a total investment of 4.023 billion yuan. The project will help the company to realize its resource integration capabilities, implement the Internet of Things strategy to respond to the trend of smart manufacturing development, promote the transformation and upgrade of the service-oriented services, and increase the profitability and overall competitiveness of the service-oriented business group. At the same time, it will help reduce labor costs and improve efficiency and quality.
The 100 billion investment of BOE has caused the market to pay close attention. A number of brokerages issued a research report called it a lead to the rise of the panel industry, which helps the company to continuously increase its market share.
Frequent mergers and acquisitions promote industrial upgrading
BOE, which has led the rise of the panel business, was once controversial because of its frequent large-scale mergers and acquisitions.
BOE’s predecessor was the Beijing Electronic Tube Factory, which was China’s largest electronic element factory at the time. However, as the electron tube technology was replaced by semiconductor technology, the company’s operations were in trouble. In April 1993, the company was reborn and changed its name to Beijing Dongfang Electronics Group and started its second venture.
At the beginning, the company and Panasonic Japan jointly established Beijing Panasonic Color Picture Tubes to produce color picture tubes, but did not master the technology.
In 1997 and 2001, BOE B (4.70-2.29% stocks) stocks and A shares were listed one after another and the financing channels were broadened. At that time, BOE suffers from a lack of technology and decided to enter the field of liquid crystal display through mergers and acquisitions.
In 2003, the company spent US$380 million (approximately RMB3.139 billion) successfully acquiring South Korea's Hyundai Electronic TFT-LED business, related patents and team. This is China's largest high-tech industry overseas mergers and acquisitions at that time, and this acquisition marks BOE's official entry into the field of thin-film transistor liquid crystal display devices (TFT-LEDs).
After the transaction was completed, BOE integrated domestic and international resources and realized the purpose of “China production and global sales†of the industry.
After the door of M&A was opened, BOE’s mergers and acquisitions were successively staged.
In August 2003, it took a leverage of RMB 1.05 billion to acquire 26.36% of TPV Technology. At that time, TPV was the second largest display manufacturer in the world, and it was the second largest customer of modern display. After the acquisition was completed, the upstream and downstream industry chains were opened and BOE became the largest LCD company in China.
However, starting from 2007, BOE's operating conditions are not very good. The company has suffered losses for two consecutive years and the stock has been ST. In 2008, BOE sold the entire equity of TPV Technology for a price of 2.2 billion yuan.
Although the acquisition of TPV Technology, but the pace of mergers and acquisitions of BOE did not stop.
In June 2008, BOE took over Beijing Xunium Electronic Glass to secure the supply chain of CRT industry. In 2009, RMB 2.5 billion acquired 100% equity of Shanghai Broadcasting and TV NEC LCD. In 2010, 290 million yuan was acquired for 100% equity of Taiwan Unitech. In 2013, 8.533 billion yuan was increased to acquire 48.92% equity of Beijing BOE display technology. In July 2014, 6.3 billion yuan was acquired for a 41.90% stake in Chongqing BOE optoelectronics technology. In 2015, RMB 250 million was acquired by Mingde Investment in the distribution of health care industry. In 2016, 1.172 billion yuan acquired 54.70% of the equity of SNEC and deployed the onboard display.
On the evening of March 16, the company’s holding company, BOE Smart Retail (Hong Kong) Co., Ltd. SPV completed the acquisition of SES-imagotag shares. As of March 16, SPV had a total offer of 358.25 million shares. At this point, SPV accumulatively holds 79.94% of the circulating shares of SES and paid a total consideration of 324 million euros to realize the consolidated financial statements of SES.
According to incomplete statistics of the Changjiang Business Daily reporter, from 2010 to the end of June of last year, BOE carried out 11 mergers and acquisitions of a certain scale, and the transaction price was 24.303 billion yuan. From 2000 to 2013, the company’s investment in the project (including supplementary liquidity) totaled 187.475 billion yuan.
After the series of mergers and acquisitions, BOE has grown from a layman to an industry leader. In October last year, the company’s first China-made, global second flexible AMOLED production line was supplied in volume in Chengdu in advance and successfully broke Samsung’s monopoly. It was dubbed “the country’s most important deviceâ€.
One-year profit offsets 4 years loss
BOE’s profitability, which has led the rise of the panel business, has also been strongly suggested.
According to the performance forecast issued by BOE A1 on January 27, the net profit last year will reach 7.5 billion yuan to 7.8 billion yuan, and the net profit in 2016 will be 1.783 billion yuan, an increase of 2.98 times from the same period of last year to 3.14 times.
In fact, the overall operating performance of BOE A has not been very good since its listing. When it was listed on the market in 2001, the net profit was RMB 60 million. In 2005 and 2006, it suffered losses for two consecutive years. After turning losses in 2007, it made another loss in 2008. In 2009, it turned losses into losses in 2010, totaling a loss of 6.17 billion yuan in four years. The net profit after deducting non-recurring gains and losses, the company in the five years from 2007 to 2011 are losses, a total loss of 8.608 billion yuan.
However, since 2013, the company's profitability has gradually increased. From 2013 to 2016, the net profits realized were 2.353 billion yuan, 2.562 billion yuan, 1.636 billion yuan, and 1.783 billion yuan respectively. Last year's net profit will be sufficient to make up for the losses in the past four years.
The significant increase in the profitability of BOE A is closely related to the previous large-scale mergers and acquisitions that promoted the transformation and upgrading of the industry. Behind this, it has been contributing to the huge financing of the capital market.
Wind data shows that the BOE A shares were listed until the end of September last year, and the company has raised a total of 316.312 billion yuan. Among them, direct financing was RMB 81.876 billion (starting at RMB 1.008 billion, fixed increase of RMB 70.886 billion, issuing bonds of RMB 10 billion), and indirect financing (calculated on incremental liabilities) of RMB 76.413 billion (mainly short-term loans for new growth). According to the company's cash inflows for financing, the company's indirect financing reached 234.436 billion yuan.
It is worth mentioning that BOE's investment in research and development investment is not cheap. From 2012 to 2016, R&D investment was 1.781 billion yuan, 1.904 billion yuan, 2.477 billion yuan, 3.319 billion yuan, and 4.139 billion yuan respectively, with a total investment of 13.62 billion yuan.
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