Flat panel display industry: new technology to improve the reflective coating technology to enhance the user experience of smart terminals, open the industry market space

Investment point:

Anti reflective coating is of great significance, significantly enhance the user experience of leading enterprises in the global consumer electronics cover glass Corning recently said that at present almost all mobile phone, tablet computer screen in the sun under the visual effects are very poor, mainly surface cover glass (main component of SiO2 and Al2O3) refractive index higher, more than 1.5, even the best reflectivity of the panel is still 5%. Want to improve visibility, there are two methods, one is to improve the brightness of the screen, the second is to reduce the reflection screen; but the former power consumption increases, further shorten the has not long intelligent terminal standby time. So it is significant to change the glass surface using reflection technology, can reduce the reflection of electronic products in indoor and outdoor light, reduce electricity consumption, greatly enhance the user experience.

Corning vigorously promote anti reflection, the top two smartphone may take the lead in using: Kang Ning operations manager in 2013 July mobile summit said, Corning is developing anti reflective glass, can eliminate the user in the use of light when the screen glare, he said "this will enable reading in the sun is very easy to". Currently Samsung GalaxyS4 and apple iPhone5s are using Corelle gorilla glass, in the era of smart terminals stressed the consumer experience, the reflection screen is likely to become the focus of the two strong competition. And once the flagship machine on the application of the technology, it may be open to reduce reflection in the field of consumer electronics market space. Not only is the existing high alumina glass / soda lime glass need to be reduced by reflection, the future may be more than the sapphire screen technology, because of its refractive index (1.76~1.78) is higher than the white glass (1.50~1.52).

Anti reflection is expected to open in the field of consumer electronics market space: the coating machine reducing reflection technology are widely used in photovoltaic glass, consumer electronics limited to high-end TV of large size, such as Philips, Sony, sharp and other 55 inch television screen with antireflection coating, also Pu Xia LCD whiteboard also uses ultra low reflection black TFT LCD screen. In the small size of the flagship glass cover plate with the expected reduction of reflection, we have reason to look forward to reflect the technology is expected to open the consumer electronics market in the field of space. Under the three scenarios, the total market volume of AR film reached 31, 66, 9 billion 200 million yuan, the growth rate was 224%, 595%, 871%.

Process difficult to ITO coating industry enjoy high margin: antireflection multi-layer coating, number more than ITO coating; while reducing the reflection of uniformity, thickness requirements higher, higher overall process difficulty industry enjoy higher gross margin level. Coating costs accounted for less than 1% of the cost of intelligent terminals, downstream customers lower price sensitivity, the company is expected to be a long time before the technical ability to maintain high gross profit. At present, the industry's average reflectivity can be 4~5%, technology, process capability strong industry can be reduced to 0.25%~1%.

Investment logic: new markets, high margin for the outbreak of the demand of benefit (victory precision): reducing reflection coating technology as to significantly enhance the intelligent terminal user experience means one of, the technical reserves in place, cost accounting for less than 1%, we judge anti reflective coating is expected in 2014 appear in the flagship smartphones machine, thereby opening in the terminal of small size of the entire consumer electronics market space. Due to higher technical barriers, the whole industry can enjoy high gross profit, in the case of the need to find the logic is expected to have the benefit of the company's production capacity reserves.

Victory precision (002426.SZ) in September 2011 announcement and ordinary glass joint venture victory photoelectric professional engaged in glass anti reflective vacuum sputtering, coating equipment, the current total investment 60 million yuan form 54 million square meters of production capacity, in the domestic leading position. Since then the company to increase investment, is expected to become the leading enterprise in the field of reflection reduction. At the same time the company has the ability to reduce the reflectivity to less than 1%, the world's outstanding technical capabilities. The company is Lenovo's strategic partner, to qualify for the Samsung supplier, touch screen industry certified by Microsoft to become mainstream it supplier. We believe that the company is in capacity expansion, is expected to continue to increase in the global supply chain in the position, the maintenance of the "recommended rating.

Risk warning: anti reflective coating global supply system is not perfect; in 2014 the flagship model did not use the anti reflection technology; industry appears to be more than the expected increase in production capacity, resulting in fierce competition.