Although there is still a long way to go before making a profit, BOE's layout in the Internet of Things and smart medical care is non-stop.
On the evening of November 8, BOE announced that it signed a cooperation agreement with the People's Government of Fangshan District, Beijing on the same day. It plans to invest 13.6 billion yuan to build a life science and technology industrial base project in Beijing, and build a world-class life science and technology innovation ecosystem for medical education, research and production. .
The announcement shows that the first phase plans to invest about 13.6 billion yuan. It plans to have a R&D and operation center of the health business headquarters, a life science and technology innovation center/international medical transformation center, an excellent medical science and education center, and a digital hospital. It is expected to be put into operation in 2022.
The relevant person in charge of BOE said that the display panel business is BOE's present, the smart system business is the next growth point of BOE, and the Health Care business will support BOE's longer-term development.
oversupply
Behind the development of the Internet of Things and medical health, BOE has been facing the dilemma of declining net profit.
According to data from the third quarterly report of BOE, in the first three quarters of 2018, BOE achieved revenue of 69.46 billion yuan, a year-on-year increase of 0.08%; net profit of 3.38 billion yuan, a year-on-year decrease of 47.8%. BOE pointed out that the five mainstream display panel markets are basically saturated, with limited room for growth.
It is understood that panel prices are at a low level this year and continue to decline, especially for super-sized panels with higher unit prices.
According to data from the First Mobile Phone Industry Research Institute, panel prices have fallen to the lowest point since 2016 across the board. The production capacity of large-size panels will increase by 31% from 2018 to 2021, and the ratio of oversupply will increase year by year. The panel industry will face serious oversupply in the next three years.
In order to mitigate the impact of panel price fluctuations, BOE shifted the production capacity of its Beijing Gen 5 line from panels to sensors; in addition, it increased the production capacity of foundry manufacturing to speed up the consumption of panel production capacity.
In addition, it is not only BOE that is facing such a dilemma. On November 1, TCL Group released a record of investor relations activities, showing that in the first three quarters, Huaxing Optoelectronics achieved sales revenue of 19.05 billion yuan, a year-on-year decrease of 6.8%, and profit before interest, tax, depreciation and amortization of 6.1 billion yuan, a year-on-year decline. 28.99%.
A senior industry insider said that from the perspective of demand, the panel stocking season for complete machine companies has ended. As of the second quarter of next year, it is expected that the market will still lack factors to stimulate demand. It is expected that with the arrival of the peak stocking season, the panel price pressure in the third quarter of next year There will be easing.
long-term development
In order to cope with the impact of cyclical fluctuations in the panel industry on performance and enable the company to achieve long-term stable development, BOE has set a new strategy a few years ago, relying on three major sectors: display and sensor devices, IoT smart systems, and smart health services.
According to data from BOE's 2018 semi-annual report, in the first half of the year, BOE's smart health service business achieved revenue of 526 million yuan, a year-on-year increase of 7.45%. Although it only accounted for 1.2% of total revenue, the growth rate was relatively fast; The revenue of connected health services was 7.35 billion yuan, a year-on-year increase of 4.01%.
The First Mobile Research Institute learned that BOE's smart health service business is subdivided into the mobile health IoT platform business group and the smart health service business group.
Among them, Hefei Digital Hospital, a smart health service business group, moved into equipment in February, and Chengdu Digital Hospital is also steadily progressing construction as planned. At the same time, the total solution service of the health park continued to increase revenue, and accelerated the development of new products of the mobile health IoT platform business group and the construction of online and offline sales channels, thereby steadily improving the competitiveness of the industry.
Chen Yanshun, CEO of BOE, pointed out that in the next five years, BOE will fully open the technology and application sides, promote cooperation in OLED, sensing, medical technology, artificial intelligence, big data, etc. , energy, office and medical and other fields of collaborative innovation.
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