Panel stocks have recently faced pressure due to oversupply in the Chinese market; however, Yuanta's recent report offers some hope for certain panel makers and has given AUO (2409) an 'upgrade to Buy on Dips,' setting a six-month target price at NT$16.

According to the latest TrendForce report, the prices for TV and laptop panels remained stable as of late April, indicating a delicate balance of market demand. Due to rising inventories and uncertainty over tariffs, many brands started to adjust orders downward in April, leading to a revised season-on-season shipment growth of just 2% for TV panels in Q2. However, with adjustments in supply conditions, AUO's outlook seems to be brightening.

Yuanta expects that, since many of AUO and Innolux's facilities are located domestically, along with the 90-day tariff exemption, client demand is anticipated to rebound, and Q2 shipments may grow against the odds. Furthermore, Yuanta has raised AUO's investment rating to 'Buy on Dips' while maintaining the NT$16 target price. Looking ahead, although the overall panel industry still faces challenges of oversupply, AUO is performing well in terms of transformation and cooperation projects, and significant growth potential is expected in the coming years.