TrendForce：Lunar New Year sales surged 9.4% YoY in China and restocking momentum for May 1st will continue

According to the survey of WitsView, the display research division of TrendForce, and its Chinese partnerΣintell, the LCD TV sales for Chinese Lunar New Year in 2013 during 24th December-6th January and 28th January-10th February attained 5.705 million units, growing 9.4% YoY. Among these, the two weeks for the New Year holidays and two weeks for the Lunar New Year holidays held YoY growths of 5.9% and 15.1%, respectively, meeting and better than expectations.(Figure 1.)    

Figure 1. LCD TV sales volume for Lunar New Year in China

Source：WitsView

WitsView’s research director Burrell Liu indicates that there were three reasons for the sales growth. Firstly, China’s economic situation and indicators stabilized; secondly, the weather during the Lunar New Year holidays was better than last year, supporting consumers’ purchases; thirdly, the promotion period during the New Year holidays was extended and closely followed by the Lunar New Year promotions. 

Based on the related statistics on the Lunar New Year sales, the sales results for China top six brands climbed 18% YoY, higher than expected, the inventory after holidays dropped 2.2 weeks to 5.9 weeks, and the sales penetration rates for 3D and above 50” lifted to 42% and 10%. The MoM growth for the 42”- 49” sales was 2.1%, while the LCD TVs conforming to energy-saving regulations controlled a penetration rate surging to 91% from 43%, showing the energy-saving subsidy policy took traction. Σintell projects the TV volume subsidized by the policy from January to May 2013 will reach 15.59 million units, and the subsidy amount is also expected to climb from RMB295 to RMB333 per unit. The following restocking for May 1st will be activated again and mark the first promotional battle of high resolution TVs (4K2K) in China. Top six brands all devote to developments, Innolux and CSOT are relatively active while Innolux develops high resolution 39” products to respond. (Table 1.)

Table 1. 4K2K panel application for top 6 brands

Source：WitsView
    
According to WitsView, the sales results for Lunar New Year in China meet or are better than expectations, and the positive news will stir the restocking momentum before May 1st. The atmosphere in China will lead prices of certain panel sizes to stabilize in March, but the structural inventory issue may surface again after May 1st on the end of the subsidy policy and the coming of the slow season. The unstable panel prices will show again if panel makers can not adjust capacity appropriately.