Boe 6.3 Billion Debt Exemption By The Government Is Expected To Increase Profits This Year 900 Million Yuan

So prudent, the Fuzhou city government to the BOE A (6.390, 0.12, 1.91%) (000725) 6.3 billion yuan issued a "red envelope."

On the evening of January 16, BOE A announced that it has recently signed the Debt Exemption Agreement with Fuzhou Chengtou BOE Investment Co., Ltd., Fuzhou Urban Construction Investment Group and Fuzhou Municipal People's Government on the "Fuzhou 8.5th Generation New Semiconductor Display Device Production Line Project Investment Framework Agreement" , Exempting companies from using the loans for the project totaling 6.3 billion yuan.

Notice said that this debt exemption belongs to assets related to government grants recognized as deferred income. This matter will have a positive impact on the operating results of the Company. It is estimated that this transaction will generate a revenue of about RMB900 million by 2018.

As of now, the project has been mass-produced and the yield has reached a high level.

Analysts believe that Fuzhou city government exempt from debts embodies the state's attitude toward BOE A's industry support. Moreover, in the long run, the BOE A Fuzhou production line, which has entered a virtuous cycle, will bring returns to the local government such as tax revenue and jobs.

Therefore, the 6.3 billion hit on the head of the BOE A "pie" is different from the previous national subsidies Bottom, should be the company's fundamentals for the good "Matthew effect."

From the listing date, the main "high financing, high loss, high expansion" model BOE A panel has gamble billions.

BOE A from 2001 to 2015, a total loss of 7.5 billion yuan, without government subsidies bottom, the company will be unsustainable.

Since 2006, the government grants 92 million, BOE government blood transfusion received year after year, in 2012 the government subsidies even as high as 2.62 billion. According to statistics, since 2006, the company has received government grants of more than 6 billion yuan.

However, after entering 2016, the fundamentals of the company started to change dramatically.

Earnings reports, the company in the first three quarters of 2017 operating income of 69.408 billion yuan, an increase of 51.41%; net profit of 6.476 billion yuan, an increase of 4503.51%; earnings per share of 0.185 yuan.

Among them, the third quarter BOE A operating income of 24.803 billion yuan, an increase of 27.89%; net profit of 2.173 billion yuan, an increase of 230.68%.

This is the fifth consecutive quarter BOE A achieved performance growth. Since mid-2016 LCD panel prices rebounded, BOE A's performance will continue to grow from the third quarter of 2016.

Public information, the first three quarters of 2017, the company shipped the number of accounts for 25% of the world, ranked first in the world.

On October 20, the 6th generation flexible AMOLED production line of the Company was put into operation. On December 20, the first 10.5-generation line invested by the Company in the world recently delivered the first batch of products, marking a new milestone in the global display industry.

Chen Yanshun, CEO of the company, said that in the next 3-5 years, the company will maintain its turnover doubling every 3 years from 68.9 billion yuan in 2016 to nearly 300 billion yuan, of which soft and hard integration and service revenue will From less than 15% now up to 40%. Expand 100+ IoT market segments in 5 years and provide at least 6 billion IoT smart ports.