Korean LCD companies continue to sell and sell, and Chinese companies become the largest buyers. On the evening of June 9th, 600884.SH announced that the company was seeking to buy LCD polarizing business and related assets in Korea, LG and China, and the benchmark purchase price was $770 million (about 5 billion 440 million yuan) in Chinese mainland, Taiwan, China and Korea. On the 10th, Shanshan shares rose and closed at 13.76 yuan.
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According to the announcement, according to the framework agreement signed by the company and LG Chemical, LG Chemical will set up a holding company in cash in China, Shanshan shares will acquire 70% of the equity of the holding company in the form of capital increase, and LG Chemical holds the remaining 30%.
For the above information, the first financial reporter successively consulted fir shares and LG chemical parties, fir shares said ," all content is subject to the announcement ," the head of LG chemical to the first financial reporter said, can be understood as the company's excess capacity into shares for sale.
In addition, the relevant head of LG Chemical also said that since Shanshan Co., Ltd. has not been engaged in the polarizer business before, LG Chemical plans to sell 70% of its shares first, and gradually sell the remaining 30% of its shares to Shanshan Co., Ltd. in the next three years, so LG Chemical will withdraw from the LCD polarizer market except for the automobile polarizer.
According to LG Chemical's 2019 annual report, polarizers account for the largest proportion of LCD related products produced by the company, with an annual revenue of about 1.6 trillion won (about 9.515 billion yuan), of which more than 80% is supplied to LG display (hereinafter referred to as "LGD") for LCD panel production.
Park Zaiqin, president of the Korea Semiconductor Liquid Crystal Engineering Society, told First Finance that the sale of the polarizer business to LG Chemical's shares meant that the LG group's subsidiaries "decoupled" from LCD business.
Since then, other subsidiaries of LG Group, which provide raw materials for LGD, are also gradually selling relevant industrial chains.
LG chemical announced in february 2020 that it would sell some of its capacity in china for 334 million yuan to siyang international, a subsidiary of jacques technology (002409. SZ).
This also means that both Korean companies will stop the production and supply of LCD panels and withdraw from the competition in this market.
In recent years, the trend of "China, South Korea and retreat" in the LCD market is more obvious. According to the Korea Semiconductor · Liquid Crystal Engineering Society, by 2023, the market share of Chinese enterprises in the global panel market will reach 58%, and it is predicted that 19 large panel factories with 8~10.5 generation lines will be set up in China by 2022, and the production cost of their products is only 1/3~1/5 of that of the Korean factory.
Due to the expansion of global LCD panel supply, the products gradually enter the stage of price competition, which is more unfavorable for Korean enterprises with limited domestic demand market and closed supply chain.
Omnia statistics show that global TV machine shipments fell 0.7% year-on-year in the first half of 2019, and the overall inventory of panel factories reached an all-time high in April this year.
Wang Haiqiang, an analyst at Bohai Securities, believes that in the context of a large-scale market surplus, some Chinese enterprises who want to seize the market opportunity after the exit of Korean enterprises turn to control core raw materials in order to obtain possible market dividends.
According to mr wang, the price of the purchase is "cabbage SZ ", which makes it easy to understand why fir shares are eager to" eat "all the fixed increase.