BOE: Capacity curbs collide with the World Cup — will the price hike last?

BOE Technology (000725.SZ) released its Q1 2026 results (ended Mar 2026) after the A-share close on Apr 29 (Beijing time). Key takeaways are below:

1. Overall results: BOE posted revenue of RMB 51.0 bn in Q1 2026, +0.8% YoY. Panel ASPs were slightly lower YoY (~2%), implying shipment volume likely rose YoY.

$BOE(000725.SZ) Q1 2026 net profit was RMB 1.71 bn, down 12% YoY, mainly due to higher R&D and other operating expenses. The expense mix weighed on profitability.

2. GPM and expense ratio: Q1 GPM was 15.6%, down sharply QoQ. Mainly due to company-specific effects.

The company booked substantial reversals of asset impairments last quarter (approx. RMB 2.1 bn). This inflated the prior quarter's GPM and skewed the QoQ comparison.

Excluding Q1 asset impairment (approx. RMB 135 mn) and related effects, Adj. GPM was 15.3% (+20bps QoQ), with panel prices ticking up QoQ.

3. Panel pricing: BOE's revenue is primarily driven by large TV panels, so pricing directly impacts earnings. Based on 65/55/43/32-inch panel quotes, large panel prices rose ~5% from end-2025 to end-Q1.

4. Inventory: Inventory was RMB 25.5 bn in Q1 2026, -8% QoQ. The inventory-to-revenue ratio fell to 0.5, a relatively healthy level.

Dolphin Research view: Earnings are highly tied to pricing; watch the durability of this upcycle.

Revenue was broadly flat this quarter. The profit decline was driven by higher R&D and G&A.

Operationally, BOE's true GPM (under original accounting, including impairment effects) was 15.3%, +20bps QoQ. Combining 15.3% GPM with an opex ratio of 11.9% implies core OPM of ~3.4%.

Dolphin Research adjusts profit as GP minus taxes and opex plus impairment losses. Adjusted profit was ~RMB 1.379 bn in Q1, implying a net margin of ~2.7% on RMB 51.0 bn revenue (after taxes and impairments).

Since 2024, panel prices have been relatively stable with limited volatility. BOE's adjusted net margin has hovered around 0–3%, near breakeven, underscoring the tight linkage between operations and panel pricing. Earnings remain highly sensitive to ASPs.

Earlier price rises were driven by supplier-led capacity cuts rather than demand improvement. As panel makers return to profitability, utilization ramps, restoring supply-demand balance and stalling price gains.

From 2024 to date, panel prices have been range-bound and BOE's core biz sits just above breakeven, suggesting a balanced market. Notably, Chinese New Year-led production curbs and the World Cup disrupted that balance. Panel prices began to rise modestly from Feb 2026; we will watch the trajectory.

Capacity modulation by panel makers can influence pricing and directly impact GPM and earnings. But sustained demand recovery is the key signal for a cyclical upturn.

As the industry leader, BOE benefits from scale and better loss absorption. Despite cycles, BOE's overall scale continues to expand.

BOE and TCL CSOT together hold over 50% share of global LCD panels. The duopoly enables 'produce-to-demand' to stabilize pricing during weak demand. Post industry reshaping, top players have more proactive pricing control versus reactive, loss-driven production cuts.

With the World Cup approaching, demand should improve. That said, if memory prices keep rising, end-demand could be squeezed, potentially capping TV recovery. Panel prices will sway near-term results, but rising market concentration should dilute cyclicality, making BOE's earnings more stable.

Below are Dolphin Research's charts on BOE.

Dolphin Research BOE archive:

Mar 31, 2026 earnings review 'BOE: A grinding cycle—can the leader only eke out thin profits?'

Oct 30, 2025 earnings review 'BOE: Panel prices fall again—can a 1% margin hold?'

Aug 27, 2025 earnings review 'BOE: Core biz just above breakeven—when will price hikes return to save the day?'

Apr 22, 2025 earnings review 'BOE: A tailwind for panels, with tariff clouds adding uncertainty?'

Risk disclosure and statement: Dolphin Research disclaimer and general disclosure