BOE'S 20 Billion Day Increase: A "Multi Air Battle" Around The 230 Billion Panel Leader

After BOE a (000725. SZ) released the 20 billion fixed increase plan on the evening of January 15, the debate about the 230 billion panel leader did not stop.

On January 18, in a well-known financial stock bar, BOE A's popularity ranked fifth. On the first trading day after the issuance of the fixed increase plan, BOE a fell sharply at the beginning of the trading day, with a drop of nearly 5%. After midday, the decline narrowed and was close to the end of the trading day. The stock price finally turned red, up 0.59% to 6.84 yuan by the end of the day. The turnover was 12.851 billion yuan, the turnover rate was 5.76%, the amplitude was 6.62%, and the total market value was 238 billion yuan.

It is worth noting that on January 12 before that, BOE had risen by 8.92%, and the turnover and turnover rate on that day were lower than today's, indicating the fierce capital struggle today.

As for the discussion on BOE A's fixed increase plan of 20 billion yuan, according to the reaction in the stock bar, small and medium-sized investors howled and formed an almost unanimous pessimistic view that this was "arbitrage retail money" and "harming the interests of small and medium-sized investors".

On the contrary, the view of the organization is generally optimistic, that the company will lock in the panel capacity and its leading position will be further revealed after the fixed increase is implemented.

How to look at the chain reaction brought about by the fixed increase? Two groups of views are surging above the 100 billion leader.

Can we increase the company's performance

To understand the medium and long-term impact of this fixed increase on BOE, we may as well look at the specific conditions of each project item by item.

According to the plan, 20 billion net fund-raising will be used for "acquiring 24.06% equity of Wuhan BOE", "increasing capital to Chongqing BOE and building the 6th generation AMOLED (flexible) production line project of BOE Chongqing", "increasing capital and building 12 inch silicon-based OLED project for Yunnan chuangshijie optoelectronics", "increasing capital for Chengdu BOE hospital and constructing Chengdu BOE hospital" and "repaying Fuzhou City Investment" For group loans, the amount of funds raised was 6.5 billion yuan, 6 billion yuan, 1 billion yuan, 500 million yuan and 3 billion yuan respectively, and another 3 billion yuan was used to supplement working capital.

Among them, there is about BOE's acquisition of Wuhan BOE optoelectronic shares, the market generally believes that it will increase the company's performance.

Wu Ruofei, an analyst in the electronics industry of Northeast Securities, believes that "Wuhan BOE mainly produces 32 inch and above large-size display screen products, and its revenue mainly comes from its construction and operation of the 10th.5th generation TFT-LCD production line. The production line will achieve mass production by the end of December 2019, and is expected to achieve full production in 2021. With the rise of LCD panel price, Wuhan BOE is expected to further increase the relevant performance of TV panel business. In addition, the acquisition price is basically consistent with the actual amount of capital contribution of the counterparties. "

Chongqing BOE project is also generally optimistic about the outside world. "The project is another layout after Erdos 5.5 generation line, Chengdu generation 6 AMOLED project and Mianyang 6th generation AMOLED project. The project is expected to further optimize the industrial chain structure, which is of great significance to the industrialization of AMOLED display devices." Wu Ruofei pointed out.

Lin Zhi, chief analyst of witdisplay, further said in an interview, "because BOE has already entered Apple's supply chain, it will accelerate the process of Chongqing's 6th generation flexible project through fixed increase, which will increase the supply to apple in the future, which is helpful to the company's revenue."

However, Nyingchi pointed out that the above two projects will not necessarily play a significant role in improving the company's profits. "Wuhan project has a short time of mass production, there is certain amortization, and Chongqing project also has amortization problems, so it does not necessarily have a lot of profit space, but it has a certain role in improving the market value."

For the other two construction projects, Nyingchi said, "the Yunnan project is mainly aimed at the future AR / VR market. This market has not yet risen. It belongs to the layout ahead of time. It will not significantly improve the company's performance in the short term, but it will help BOE layout the next generation of display technology, which is a strategic consideration. The Chengdu project belongs to medical and intelligent display, which can help BOE expand more application scenarios and reduce more production capacity. "

The debate between short term benefit and long term strategy

As a global semiconductor display leading enterprise, BOE's industrial scale and technical strength are in the leading position in the world. In the long run, the implementation of the above fixed increase project will further consolidate its leading position.

However, the share price has always been a "sword of Damocles" hanging on BOE's head, and the performance of the secondary market always seems not to match its position.

Wind data shows that BOE's share price has hovered in the range of 2-6 yuan / share in the past five years, and finally climbed to 7 yuan at the beginning of this year.

"In recent years, the stock price has been lukewarm and tepid. It's hard to wait for the panel price to rise, and the stock price has reached a new high, so we will sell a fixed increase of 20 billion yuan. For retail investors, they can only passively accept the diluted equity of listed companies, and the earnings per share will also decrease. In the short term, it will definitely have an impact on the stock price. " On January 18, an individual investor who has been following BOE for a long time told reporters.

In the stock bar, investors compare it with another panel leader TCL technology. Since the end of last year, the share price of the latter has been on the rise. On January 18, the share price reached the peak of 10.25 yuan per share, which can be called "the child of others" in the eyes of 1.2 million BOE investors.

History is always surprisingly similar. In 2013, BOE launched the largest refinancing of A-shares at that time, raising nearly 46 billion yuan in one-time, which also caused doubts in the market.

At that time, Chen Yanshun, the then president of BOE, once responded to the media when facing market doubts, saying, "the additional issuance scheme may have a short-term impact on small and medium-sized investors. It is not that BOE does not attach importance to the rights and interests of small and medium-sized shareholders, but that we should combine the short-term interests of investors with the long-term strategy of the company." "Frankly, it is the result of compromise. On the one hand, we don't want too much reaction in the market, on the other hand, we have to ensure the funds needed for the development of enterprises. "

Or it has already predicted the sentiment of shareholders. After putting forward the 20 billion fixed increase plan, BOE also released a plan for shareholders' dividend return in the next three years (2021-2023).

BOE said that, except for special circumstances, when the company makes profits in the current year and the accumulated undistributed profit is positive, it will give priority to cash distribution of dividends. The profit distributed in cash every year shall not be less than 10% of the profit available for distribution realized in the current year. Among them, if the company's development stage is mature and there is no major capital expenditure arrangement, the minimum proportion of cash dividends in this profit distribution should reach 80%.

On January 18, a market person analyzed to the reporter, "BOE still has 60 billion cash on its book, and it seems unnecessary to raise another 20 billion yuan. Perhaps behind this is the stronger equity relationship with SASAC in Beijing. "

According to the plan, BOE a will issue to no more than 35 specific investors. Among them, jingguorui fund plans to subscribe with 4 billion yuan in cash. Jingguorui fund is the main body controlled by Beijing state-owned capital operation and management center, and has signed the "concerted action agreement" with Beijing Electronic Holding Co., Ltd. to consolidate the control position of Beijing electric control in BOE.

Eight years later, it is still fresh to read Chen Yanshun's reply at that time.

However, compared with that time, the current situation is not the same. In 2021, the trend of panel price is confirmed, the industry is generally expected to improve its performance, and BOE's profitability is also optimistic. BOE fixed increase in the secondary market significance, may as well give time.