The latest research report of Nomura Holdings showed that the full production cycle of the display industry will continue in 2017. The investment in the OLED development got paid off and the demand grew strong. The periodic price of LCD display also bounced back. All of that brought prosperity to the display industry. Nomura Holdings reckoned that among Taiwanese display makers, InnoLux will gain more profits than AUO, and marked it as ‘buyable’, along with an increase of NTD$ 1.3 in the suggested price from NTD$ 13.7 to NTD$ 15 per share.
According to the report, the prosperity is in the light of three major factors. Firstly, the output of display in 2017 is expected to be tightened. Also, the utilization rate of manufacturers worldwide has already reached 95%; in other words, there’s little room for more capacity. Thirdly, the price of display rose as the TV manufacturers promoted products with 8K/4K resolution and upgraded the size of displays used. All things considered, Nomura thinks the display industry will continue to have a bull market in 2017.
In addition, Nomura Holdings also addressed in the report its faith in the development of OLED’s application on wearables in 2017. Given that the OLED display will be the mainstream used for the next generation wearables, and that the improvement of designs and techniques of OLED on devices will require more cost, it is anticipated that the investment in equipment used for OLED development will gradually increase.
Nomura suggested, in terms of the Taiwanese manufacturer that benefited the most, InnoLux is the top choice for investors. It also re-evaluated InnoLux as ‘buyable stock’ as it expected the growing pricing of display will subsequently raise InnoLux’s operating profit margin. The suggested price for the next 12 months is also adjusted upward from NTD$ 13.7 to NTD$ 15.