汇丰银行：2012年12月亚洲液晶面板行业研究报告（25页）

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Bigger size, bigger profit. Size migration is happening, andopens thedoor to multi-year margin expansion. Revenuegeneration is 25-50% higher whencutting larger panels(50”-plus) vs. smaller panels. We expect significantmarginexpansion opportunities ahead, as less than 20% of globalcapacity isdedicated to large-sized panels now; however, weexpect the mix will approach40% next year and result in 3-6ppt GM expansion in 2013.

Decline in depreciation expense to kick into higher gear,as the industrypractices highly disciplined supply expansion.

We expect a boost of3-4ppt in margin for Taiwanese playersin 2013, while LG Display (LGD) shouldstart to reapbenefits in 2014 and beyond. We estimate that more than 60-70% ofLGD, Chimei Innolux (CMI) and AU Optronics(AUO) capacity should be fullydepreciated in 2014-15, upfrom the current 40-50%. The trend of depreciationroll-offwill likely continue, even if each panel maker adds a sizableGen 8.5fab in the coming three years.

Shares are still trading well below their mid-cyclemultiples,despite what weconsider to be the best fundamentals in years.

We raise our 2013earnings estimates by 30-60% to reflectrobust revenue and margin expansion,which, on average, couldrise 10ppt y-o-y in 2013. Our forecasts are the higheston theStreet. In our view, any weakness will be short-lived in 2013,due toongoing size migration, controlled inventory and highlydisciplined expansion.We reiterate our OW(V) ratings on LGD,CMI and AUO on higher target prices. Weincrease our targetprices by 30-50%, partly due to higher BVPS, but mainlydrivenby migration to mid-cycle multiples (from average ofmid- and trough multiples),which we believe are welldeserved,given the future ROE profile.