In the second quarter, in response to the May Dragon Boat Festival promotion, the World Cup and the 6.18 promotion, the number of TV panels purchased by China's first-line TV manufacturers was 19.8 million, an increase of 2% Q/Q and 19% Y/Y. Procurement is higher than the second quarter forecast, resulting in an increase in inventories.
Due to the peak season in overseas markets and the active business plan in 2018, China's first-line TV manufacturers purchased 20 million TV panels in the third quarter of 2018, an increase of 1% Q/Q and 17% Y/Y. Although they need to purchase more panels in the third quarter, inventory accumulation in the second quarter will affect panel purchases. Panel prices are still low in June, and financial pressure from some panel makers will lead to higher panel prices in the third quarter of 2018.
In May, panel makers shipped more panels in order to clear inventory. BOE shipped 4.8 million in May – an increase of 44% Y/Y and 19% M/M, mainly 32 inches (more than 2.5 million) and 55 inches (more than 6.5 million).
China's first-line TV manufacturers are the main customers of BOE, accounting for 30% of the entire BOE panel shipments, especially Skyworth, Changhong, Konka and Hisense.
Panel makers are actively cleaning up inventory, panel prices have fallen, and in May it is very close to cost. Therefore, the market is becoming more active.
Due to the rising exchange rate at the end of June and the 6.18 promotion by TV manufacturers until the end of June, all sizes except 32 and 50 inches are losing profits. Today's 32-inch profit is still better than other sizes, and some panel makers are hoping to raise the price of the 32-inch panel at a low level in the third quarter.