Premium-TV Shipments More than Double HoH
The author is an analyst of KB Securities. He can be reached at jeff.kim@kbfg.com. -- Ed.
LCD TV panel prices up 6.5% HoH in second half of September
According to WitsView, LCD TV panel prices continued to climb in the second half of September. Rising by an average of 6.5% from the first half of the month (+10.9% MoM), panel prices were USD50 for 32” (+8.7% HoH), USD90 for 43” (+4.7% HoH), USD118 for 50” (+10.3% HoH), USD145 for 55” (+5.1% HoH), USD197 for 65” (+3.7% HoH) and USD305 for 75” (+1.7% HoH). The upward trajectory in pricing has been maintained because the pandemic has spurred demand for home entertainment systems and online education services.
Manufacturers to maintain upper hand in LCD market
The LCD panel market will remain a seller’s market. The global supply of TV/monitor panels will decrease 8-10% when Samsung Display shuts down its LCD panel lines in December. Meanwhile, Samsung Electronics, LG Electronics, TCL and other global TV set makers whose panel inventories are below normal levels will attempt to gain TV market share. As a result, LCD panel prices will maintain their uptrend.
Top picks: Samsung Electronics, LG Electronics
The earnings of Samsung Electronics’ CE division (consumer electronics) and LG Electronics’ HE division (TV) will improve significantly in 2H20, as their premium-TV shipments have more than doubled HoH. We expect the OPM of both divisions to exceed 10%. In addition, LG Display’s operating income should swing into the black thanks to the resiliency of LCD TV panel prices. We favor Samsung Electronics and LG Electronics as our top picks because we expect brisk TV sales in 2H20 to provide significant earnings boosts for both companies.