京东方(000725)：下调至中性，玻璃基板预期或已被定价

BOE Technology (000725.SZ) Downgrade to Neutral as Glass Substrate Expectations Likely Priced In CITI'S TAKE We attended BOE’s investor day. BOE reiterated its position as the globalleader in displays while emphasizing that its next phase of growth will bedriven by the extension of its core capabilities into glass-based advancedpackaging, optical interconnect, perovskite photovoltaics, foldable glass,etc. BOE anticipates reaching a definitive mass-production investmentdecision by mid-2027. Its optical interconnect devices remain at a validationstage and have not yet entered mass production, but BOE targets to launchmature multi-channel product demos aligned with 1.6T, 3.2T and 6.4Tindustry requirements in 2028. We downgrade BOE from Buy to Neutralwith a new TP of Rmb8.7 (prev: Rmb5.0), as we believe current valuation hasfactored in an improving LCD biz and potential glass substrate contribution. BOE’s second and third growth curves are increasingly material —Since launchingits IoT transformation in 2021, BOE has achieved global No.1 shipment positions inmore than 20 sub-segments, including automotive display, commercial display andpublic healthcare. Innovation business revenue is expected to reach Rmb60bn in2026, representing around 30% of total revenue and becoming a major growth pillar,according to mgmt. The third-curve incubation portfolio includes perovskitephotovoltaics,glass-based packaging substrates,optical communication/interconnect, automotive dimming glass, regenerative medicine, robotics, VR/ARand 3D light-field display. Cooperation with Corning —BOE and Corning have forged a strategic partnershipto unlock global market opportunities across four key technological frontiers. Inglass-based packaging substrates, BOE is combining Corning's TGV formulationswith its experience in large-scale manufacturing to execute process qualification,technology transfer, and domestic market expansion. In optical interconnect, BOEwill combine its micro-LED technology with Corning's optical systems to achievemass-production readiness for next-generation AI data transmission. They are alsovalidating foldable and bendable glass to expand beyond smartphones into broaderautomotive & IT applications. In perovskite photovoltaics, BOE is testing Corning’sspecialized UV-converting glass to enhance module efficiency & lifespan. Propelledby these joint validations, BOE targets a definitive mass-production investmentdecision for the perovskite business by late 2026 or early 2027, anticipating it willscale into a major business pillar by 2028–29.(continued inside/below…) Karen HuangAC+852-2501-2755karen.xw.huang@citi.com Kyna Wong+852-2868-7820kyna.wong@citi.com Kevin Chen+852-2501-2125kevin.y.chen@citi.com Glass-based packaging substrates.While glass substrates are emerging assuperior alternatives to traditional PCBs for high-end AI and HPC applications,BOE is rapidly advancing its industrialization. Leveraging over six years ofexperience, BOE established mainland China’s first glass substrate pilot line in2024 and successfully delivered second-generation samples in 2025. Thecompany has overcome major technical bottlenecks, achieving significantbreakthroughs in TGV drilling (reaching a 20:1 aspect ratio), void-free metal filling,high-density routing (supporting over 20 build-up layers with sub-2μm linewidths), and chip-free cutting. Crucially, BOE’s substrates have passed rigorousindustry reliability tests, demonstrating very low warpage even during high-temperature reflow soldering. Over the next two years, BOE aims to prioritize yieldoptimization, stable mass-production capabilities, and innovative layer-reductiondesigns alongside ecosystem partners. BOE anticipates reaching a definitive mass-production investment decision by mid-2027. Optical interconnect and micro-LED light source.BOE is advancing its opticalinterconnect technologies, highlighted by its development of a micro-LED lightsource featuring a 1.8GHz response speed and a 3Gbps transmission rate. BOE isalso working with Corning and other partners on high-purity optical fiber, opticalbridges, waveguides and related optical transmission technologies. To drivetechnology implementation, BOE has outlined a clear roadmap: it plans to launch atwo-dimensional multi-channel demo by 2027, followed by mature product demosmeeting 1.6T, 3.2T, and 6.4T industry requirements in 2028. Ultimately, BOE aimsto transition these innovations into mass production, expanding their applicationto data centers and automotive interconnect scenarios. Cooperation with Corning The disclosed core cooperation areas with Corning include glass-based advancedpackaging substrates, optical interconnect, foldable or bendable glass, andperovskite glass materials. The parties aim to jointly develop global markets andpotentially create one or multiple Rmb100bn-scale new business opportunities. The first core cooperation area is glass-based packaging substrates.In the AIera, rising computing p