TCL'S Net Profit Increased By More Than 4 Times In The First Half Of The Year

Under the high prosperity of display panel and photovoltaic industry, the performance of leading enterprises has increased sharply.

On the evening of August 9, TCL technology released its financial report for the first half of 2021, with an operating revenue of 74.3 billion yuan, a year-on-year increase of 153.3%; The net profit was 9.25 billion yuan, an increase of 7.65 times over the same period of last year; The net profit attributable to shareholders of listed companies was 6.78 billion yuan, up 461.5% year on year.

Among them, the semiconductor display business achieved a revenue of 40.8 billion yuan, a year-on-year increase of 93.6%; The net profit was 6.61 billion yuan, an increase of 6.75 billion yuan on a year-on-year basis. This is also the pillar sector of TCL technology, with revenue and profit accounting for more than 50%. The new member, Zhonghuan semiconductor, achieved a revenue of 17.64 billion yuan, up 104.1% year-on-year; The net profit was 1.89 billion yuan, up 160.6% year on year.

It can be seen that TCL technology's semiconductor display, semiconductor photovoltaic and semiconductor materials have become the growth engine of TCL (Group) as a whole. At the same time, it is worth noting that TCL (Group) has also achieved growth in the field of traditional track intelligent terminals. In the first half of the year, TCL industry achieved an overall revenue of 50.79 billion yuan, up 36.3% year-on-year; The net profit was 3.35 billion yuan, with a year-on-year increase of 293.9%.

Based on this calculation, in the first half of 2021, TCL (Group) realized 115.24 billion yuan of operating revenue, with a year-on-year growth of 89%; The net profit was 10.72 billion yuan, up 460% year on year.

"According to this trend, our annual revenue should reach or exceed the budget target of 220 billion yuan, and TCL should have passed the threshold of the world's top 500 this year." Li Dongsheng, founder and chairman of TCL, said in an interview with 21st century economic reporter and other media.

This year is also the 40 years since TCL was founded. As a domestic manufacturing benchmark, TCL has been upgrading and transforming all the way. It has gone deep into the upstream and downstream vertical layout panel from the initial home appliance enterprises, and has expanded horizontally into the photovoltaic and semiconductor materials field in recent years, which is remarkable in the industrial layout and grasp.

Talking about the goals for the next decade, Li Dongsheng said: "the most important word we will talk about in the next decade is global leadership. We will be the world's leader in semiconductor display, semiconductor photovoltaic and semiconductor materials, and intelligent terminals. We will rank among the top three in terms of scale, competitiveness and business performance. Another indicator is now divided into TCL technology and TCL industry. In the next decade, we will cultivate two top 500 enterprises. "

China Star and central double growth IC projects have been put into operation

Behind the performance growth, Li Dongsheng pointed out that among them, there are reasons for the demand growth after the alleviation of the epidemic situation, the promotion of new energy policies, and the continuous change of the company. Among them, TCL CStar's growth also benefited from the merger and acquisition of Suzhou Samsung and the improvement of the original production line capacity, which led to the scale growth. In addition, the optimization of production line layout, product structure and customer portfolio improved the efficiency; The main output of semiconductor photovoltaic is monocrystalline silicon and silicon wafers. Although affected by the price rise of polycrystalline silicon, the rising cost can offset the cost of product delivery, and the increase of shipment volume also brings benefits.

On the one hand, for panel factories such as TCL Huaxing, under the epidemic situation, the large-scale trend of TV and other terminal products and the high volume of PC products have pushed up the demand for panels. In addition, the shortage of upstream chips and the withdrawal of Korean manufacturers' production capacity have made the market in short supply.

Among them, the price of large-size panel continued to rise. During the reporting period, TCL Huaxing T1, T2 and T6 production lines were full of sales and production, and T7 production capacity was climbing. Suzhou Samsung T10 consolidated its table in the second quarter, and the shipment area of large-size products increased by about 24% year-on-year; The medium and high-end displays and commercial display products have been rapidly increased, and the total revenue of large-scale displays has increased by more than 130% year-on-year, and the net profit has increased by about 14 times year-on-year. The net profit in the second quarter is about 70% higher than that in the first quarter.

In the small and medium-sized field, T3 production line expanded high-end notebook, tablet and vehicle and other emerging businesses, T4 flexible AMOLED production line expanded production as planned, and flexible folding screen continued to expand new brand customers. In addition, the T9 project for the production of medium size it display screen, vehicle mounted, industrial control and other products has been officially put into operation, which is expected to be put into operation in 2023, so as to improve the business and product structure of medium size.

By 2025, TCL China Star will have 6-7 high generation lines, and the compound growth rate of high generation lines will exceed 18% in the next five years. At the same time, the full production of T4 flexible AMOLED production line from phase I to phase III will also bring income growth.

On the other hand, if we look at central, the semiconductor photovoltaic industry achieved revenue of 16.53 billion, up 106.9% year-on-year, with a significant increase in production capacity, and achieved the goal of doubling performance in the first half of the year; In the field of semiconductor materials industry, the revenue increased by 65.8% year on year. According to reports, 6-inch and below products are in short supply for a long time, 8-inch products are accelerating domestic and overseas customer certification, and 12 inch power and special product orders are saturated.

TCL and central are also continuing to expand their scale this year. They have invested 12 billion yuan to build a 50gw (G12) solar grade monocrystalline silicon material factory in Yinchuan City, which is expected to be put into operation by the end of the year; The smart factory project of diamond wire cutting ultra-thin silicon wafer implemented in Tianjin and Inner Mongolia has been put into operation smoothly; The production capacity of Jiangsu G12 high-efficiency laminated tile assembly project has reached 6Gw, and the G12 high-efficiency laminated tile assembly project in Tianjin has entered the construction stage; And increase the investment in the leading Inner Mongolia base, Tianjin base and Jiangsu base in central, and promote the full coverage of all kinds of power semiconductor chips and integrated circuit chips.

In the field of integrated circuits, TCL technology has set up TCL microchip technology, looking for investment layout opportunities. Li Dongsheng told the 21st century economic report that there are two confirmed projects: "one is the establishment of morstar integrated circuit company, and the project is already in operation; The other is to restructure Huanxin technology, a power chip project of Zhonghuan semiconductor. In the past few years, the operation of this project has not been very good. It has been losing money and its scale is not large. This time, TCL has injected 567 million new capital to separate its original assets and form a new enterprise. It is ready to make the chip business and packaging business into an independent business sector. "

At the same time, Li Dongsheng further said, "integrated circuits are our focus, but the magnitude of these investments is about 1 billion, and the company has no plans to invest in large-scale mergers and acquisitions in the short term.".

The fluctuation of panel cycle will weaken the industrial expansion more rationally

Among the major core businesses, the trend of panel industry is still the most concerned.

In Li Dongsheng's view, "the situation of short supply in the second half of the year will be eased. However, in terms of the adjustment of global panel structure, the change of large industrial pattern and the adjustment of China's industrial policy, the cyclical fluctuation of panel industry in the future will be significantly weakened. After several years of drastic cyclical fluctuations in the semiconductor display industry and the return of government industrial policies to prudence, I believe that large proportion of projects invested by local government capital will be greatly reduced. The expansion of the semiconductor display industry will be based on a more rational and competitive business logic. "

He further analyzed that domestic production capacity, including China Star, will increase in the next two years, but Samsung and other South Korean manufacturers are gradually withdrawing from LCD, so the overall capacity increase is not as fast as that of the previous two years, while the demand continues to grow. "It is impossible to maintain a long-term balance between supply and demand in this industry, so it must have periodic fluctuations, But the range of volatility will be greatly reduced. We think that the impact of this fluctuation on TCL China Star is relatively small compared with its peers. In the future, we hope that this impact can be reduced as much as possible through our internal adjustment. "

Multi level structural adjustment has also become the common trend of panel manufacturers such as TCL China Star and BOE. Li Yaqin, general manager of sigmaitell, analyzed to the reporter of 21st century economic report: "after a big wave of price competition in 2018 and 2019, panel manufacturers are very active in adjusting. The biggest adjustment is to seize the strong demand of it in the epidemic situation to substantially reduce the 8.5 generation line, including the proportion of 8.6 generation online TV production capacity, and 8.5, 8.5, 8.5, and 8.5, respectively, of the main TV panel factories Generation 8.6 line TV has been reduced by at least 40% and 50%. Now panel manufacturers have a strong sense of crisis in the future. Fierce price competition in 2018 and 2019 hurt the profits of the entire industry chain. At that time, the whole machine brand did not get more profits. Now the panel factory is constantly thinking about making more adjustments, such as further reducing some TVs in the existing system, and allocating as many other applications as possible in the limited IC resource allocation. With the increasing concentration of manufacturers, panel manufacturers should think more rationally and create more value for the future industry. "

Taking TCL China Star as an example, in terms of optimizing product structure, Li Dongsheng said: "we increase the proportion of medium and high-end products and increase the proportion of non TV screens. In the past 12 months, the proportion of large-scale non TV screens has been increasing. By the end of June, this proportion has reached 22% in terms of amount. At the same time, we have opened up market space in new fields. Now, China Star is the largest supplier of high-end E-sports screens and one of the largest suppliers of large-scale commercial display. All these allow us to maintain the advantages of TV while opening up space in terms of new market demand. "

In the view of the industry, the panel in the third quarter will remain at a high price and gradually tend to be stable. There are also structural rises and surpluses. At the same time, panel manufacturers are also continuing to adjust their business structure, product layout, and capacity allocation to maintain the sustainability of future growth, while the leaders will choose different paths to expand their own scale.