Orient Securities: Panel discount dividends are beginning to appear, and glass-based packaging is being implemented at an accelerated pace

The Zhitong Finance App learned that Orient Securities released a research report saying that the depreciation inflection point in the panel industry has opened up financial space for profit release. China's production capacity dominates global pricing power, and glass substrates provide a second growth curve over the cycle. When the three are superimposed, the profit center of panel leaders is expected to rise systematically, and it is expected to switch from a simple “LCD cycle stock” to a “display+material” two-wheel drive. 1) The panel industry's profit center is expected to rise, and new applications in advanced packaging are expected to bring about a reshaping of valuation. 2) China's production capacity dominates global pricing power, and black power brands go overseas to accelerate the shift in industrial focus.

Orient Securities's main views are as follows:

In the past 10 years, global panel capital expenditure has exceeded trillion yuan, and the panel industry has been unstable for a long time

Currently, however, the panel industry is undergoing a critical transition from scale expansion to profit release. The inflection point of depreciation was gradually realized, and profit flexibility began to show. In terms of the industrial landscape, the global market share of panels continues to rise, forming a positive synergy with the acceleration of brands going overseas. At the same time, panel manufacturing capacity is being extended to the field of advanced semiconductor packaging, and the commercialization process of glass-based TGV technology has exceeded expectations, which is expected to drive the restructuring of the industry's valuation system.

The inflection point of depreciation has been reached, and profit flexibility has entered the cashout window

In the past, the panel industry's profits after the commissioning of related projects were seriously eroded due to huge capital expenses, depreciation cycles of 5-10 years, and overcapacity after capacity expansion. Currently, this predicament is being reversed, and the inflection point of depreciation has already been revealed. BOE's depreciation reached its peak in 2025; TCL Huaxing's depreciation peak also occurred in 2025. Depreciation is expected to gradually decline in 2026 and drop sharply after 2027. As the depreciation burden of panel companies continues to decrease, net profit will increase under the same revenue scale. In the first quarter of 2026, BOE's net profit for the quarter was 1.709 billion yuan, -11.77%, and +174.47% month-on-month; TCL Technology's net profit for the quarter was 608 million yuan, +192.94% year-on-year, and +326.26% month-on-month, reflecting the trend of the panel industry entering a profit growth cycle.

Q2 market share remained high, and the brand's overseas expansion process accelerated across the board

Chinese companies continue to accumulate advantages in the global panel industry. According to Lotu Technology data, in May 2026, global shipments of large-size LCD TV panels reached 19.8 million pieces, +2.2% year over month, and -0.3% month-on-month; the global market shipment share of mainland Chinese panel manufacturers was 72.8%, compared with +0.8% last month. Companies such as JD, Huaxing Optoelectronics, and Huke rank among the highest in the world in terms of shipment volume. Currently, there are 5 high-generation panel production lines of the 10th generation or above worldwide, of which TCL and BOE each occupy 2. The cost advantage brought about by the scale effect of high-generation production lines and the ability to control costs has been transformed into the price competitiveness of downstream terminals, promoting the dominant position of the panel industry and the positive industrial collaboration of TV brands going overseas. According to Counterpoint data, from January to May this year, TCL TV ranked second with 13% of the global market share, and Hisense ranked third. China's dominant position in the global TV industry was consolidated.

The commercialization process of glass substrates has exceeded expectations, and the signals for valuation reshaping are clear

2026 is the first year of commercial verification of semiconductor glass substrates, and the progress has exceeded expectations. BOE in China is progressing rapidly in glass substrates. It started pre-research on glass-based carrier board technology in 2020, invested 390 million yuan to build a glass-based/silicon-compatible wafer-level innovative test platform in 2022, invested 993 million yuan to build a board-level glass-sealed loading board test line in 2024, and completed the transfer and commissioning of main equipment within 2025. It has achieved fully automated equipment access in the first half of 2026. At present, BOE has completed the entire process process of glass-based sealed loading boards, such as high depth-to-width ratio TGV opening, deep hole copper filling, low stress metal wiring, high level digital pressing, high density wiring, and low stress cutting. It has complete glass carrier board manufacturing process capabilities, and has passed many reliability standard tests. On July 17, at the 2026 World Artificial Intelligence Conference, BOE revealed that it has sent samples in batches to test companies such as Changdian and Tongfu Micro, and plans to enter the batch supply phase in 2027. TCL Huaxing's glass substrates are still in the early research and technical pre-development stage. The acceleration of commercialization of glass substrate TGV technology is expected to reshape the semiconductor valuation and competition pattern under the new technology.

Risk Alerts

Demand in the global panel market fluctuates, technology implementation falls short of expectations, and industry competition intensifies.