Chinese display corporations, with the exception of the largest corporation BOE, have mostly failed to escape poor returns for years. Analysts say this contrasts with Korean corporations, which have moved to restructure by focusing on organic light-emitting diode (OLED) and high-end display products.
According to market research firm Omdia on the 26th, among 10 major global panel manufacturers, Samsung Display (12.19%) was the only one to record a double-digit average net profit margin (the ratio of net profit to revenue) over the past five years.
Chinese corporations, except for BOE (3.94%), all posted negative figures. A negative net profit margin means they posted losses. EverDisplay's five-year average net profit margin was -55.05%, Visionox was -45.34%, and Tianma was -0.12%.
In Korea, LG Display recorded a -5.04% return due to the slump in the large OLED market, but recently has shown results in improving profitability through cost reductions and expanded OLED demand sources.
In the first half of this year as well, Chinese corporations continued their weak performance. While Samsung Display recorded net profit margins of 10.37% and 6.84% in the first and second quarters, respectively, BOE and Tianma posted net profit margins of less than 0–4%. Visionox and EverDisplay still recorded double-digit negative net profit margins.
It is analyzed that Chinese companies have posted poor returns for years because they have a high share of low-priced products. Last year in the small and midsize display business, BOE's revenue share from LCD (liquid crystal display) was 31% on an annual basis, and Tianma's was 55.7%.
Even Chinese corporations that produce only OLED panels are presumed to be supplying low-priced OLED panels for the domestic market. Visionox recorded a 10.7% share by shipment volume in the global small and midsize OLED market last year, but its revenue share was lower at 6.8%. EverDisplay also had a 2.6% shipment share, but its revenue share was only 0.7%.
A display industry official said, "In the case of domestic corporations, they have a high revenue share relative to shipments, which means the share of high-priced display products is high," and added, "Abandoning cutthroat low-priced competition with China early and focusing on the high-end market is the background for still protecting profitability."