1H’21 Earnings Forecast: BOE, CPT China, TCL and Visionox

Published July 19, 2021

BOE Earnings Forecast

On July 13th, 2021, BOE released its 1H’21 revenue forecast, claiming 1001%-1018% Y/Y increase in net profits to shareholders.

Source: BOE Announcement
Source: BOE Announcement

According to BOE’s announcement, the earnings to shareholders in Q2’21 should be ¥ 7.3B to ¥ 7.5B ($1,133M-$1,211M), which would amount to a 1187% to 1221% increase Y/Y and 41%-45% increase Q/Q. This huge increase is due to increasing prices on LCD TV panels and combining B18 and B19 in the 2021 financial statement. Compared with Tianma, BOE had more gains from the increase in LCD TV panel prices, and its net profit is expected to be strong for the rest of 2021.

Net Profit to Shareholders: BOE

Source: BOE | Compiled by DSCC
Source: BOE | Compiled by DSCC

TCL Earnings Forecast

As the second largest panel maker in China, TCL also revealed its 1H’21 forecast. TCL Technology (the parent company of panel maker China Star) expects revenues from ¥ 41B to ¥ 43B in Q2’21 ($6.32B - $6.45B), and a net profit to shareholders from ¥ 5.8B to ¥ 6.3B ($908M- $970M).

  • For revenue in Q2’21, the Y/Y increase was 66%-68% and the Q/Q increase was 21%-25%;
  • For net profit in Q2’21, the Y/Y increase was 95%-96% and the Q/Q increase was 45%-48%.

The Y/Y increase is attributable to the COVID impacts in 2020 and a business profile change when TCL Tech acquired Zhonghuan, a semiconductor maker in China, in late 2020. The Q/Q increase is due to the increasing price of LCD TV panels, and the addition of the Suzhou Samsung Gen 8.5 LCD line in Q2’21.

  • In large size LCD production, TCL Tech claimed a 130% Y/Y increase in revenue, a 140% Y/Y increase in net profit and a 24% increase Y/Y in shipments in 1H’21.

CPT China Earnings Forecast

Unlike panel makers with gains from large size LCD TV panel production, CPT China claimed a net loss to shareholders of ¥ 65M - ¥ 85M in 1H’21 ($10M - $ 3M). CPT China’s revenue in 1H’21 was estimated to be around ¥ 1.45B to ¥ 1.65B ($224M – $255M).

  • The net loss reduced Y/Y;
  • Revenue increased 79%-104% from 1H’20 to 1H’21.

Because CPT China had positive earnings in Q1’2021, the loss came in the second quarter.

  • CPT China had revenues of $122M – $153M and a net loss of $14.7M to $17.8M in Q2’21;
  • CPT China is still facing operating pressure even under a rising market.

Operations of CPT China

Source: CPT China | Compiled by DSCC
Source: CPT China | Compiled by DSCC

Coincidentally, CPT China released another announcement showing that a local court is trying to sell some of CPT China’s shares held by CPT Bermuda. 91.8M shares held by CPT Bermuda will be auctioned, with a starting price of ¥ 249M (around $38.5M), or ¥2.71 per share ($0.42). CPT China shares closed on the Shenzhen stock exchange on Friday at ¥2.57 per share. This auction will be held on August 16th, 2021.

Currently, all shares of CPT China held by CPT Bermuda have been frozen by the court since January 2019. If this auction goes well, the control of CPT Bermuda in CPT China will decrease from 14.09% to 10.77%.

Auction Announcement

Source: CPT China
Source: CPT China

Visionox Earnings Forecast

Visionox continues to face many difficulties in OLED production. In its most recent earnings forecast, Visionox expects a net loss to shareholders of ¥ 720M to ¥ 850M in 1H’21 ($111M – $131M). The net loss per share in 1H’21 is expected to be -¥ 0.53 to - ¥ 0.62 (-$0.08 to -$0.10). In 1H’20, Visionox had a net loss to shareholders of ¥ 92.5M ($13M).

  • In Q2’21, the net loss to shareholders was $41M - $61M.

Net Profit to Shareholders: Visionox

Source: Visionox | Compiled by DSCC
Source: Visionox | Compiled by DSCC

According to Visionox, this large profit decrease Y/Y was due to:

  • R&D cost increasing in 2021;
  • Less compensation gained in 1H’21;
  • In 1H’20, the consulting revenue from Visionox HQ to V3 did not happen in 1H’21.

Although Visionox is a company with a deep investment in the production of flexible OLED, its financial statement shows more rigid OLED production. Based on its statement, it appears Visionox still lists the V3 fab as a long-term investment. Therefore, Visionox can hide losses and adjust revenue accordingly.

Image Description
Written by

Chase Li