Before Sharp and Sony’s representative color TV brands collectively sacrificed low-priced butcher knives, domestic color TV manufacturers suddenly fell into a dilemma of market share or profit.
On October 27th, Konka Group (000016.SZ) released its third-quarter financial report, showing that in the third quarter of this year, Konka Group's revenue was 4.541 billion yuan, a year-on-year increase of 17.84%, and it only achieved a Net profit of 10.29 million yuan, a substantial decrease of 60.94% year-on-year. In the first three quarters of this year, revenue was 12.482 billion yuan, a year-on-year increase of 38.29%, and net profit still showed the opposite trend. It was only 61,178,500 yuan, a year-on-year decrease of 42.63%.
“Foreign brands relied on upstream resources to impact the color TV market at low prices and grab market share of domestic brands.†Konka Group reluctantly stated in its financial report that although the company has been promoting LED TVs, the sales volume and sales of LED TV products are both higher than the same period of last year. With substantial growth, the product structure has been greatly improved, but it has also had to follow the low price of foreign capital, and the gross profit rate of products has been rapidly lowered. The financial report shows that Konka Group's consolidated gross margin in the third quarter was 15.17%, which was a decrease of 0.45 percentage points from the first-half gross profit rate of 15.62%.
The TCL Group (000100.SZ) is also affected by the difficulties facing the Konka Group. On October 22nd, TCL Multimedia (01070.HK), a subsidiary of TCL Corporation, issued a profit warning that intense market competition and clean up of LCD TV inventory in China and European markets have caused the gross margin of products to decline. The quarter and the first three quarters of this year will record losses.
What makes TCL Multimedia is that the loss of TCL Multimedia is based on the rapid increase in the proportion of LED TVs. In July, TCL Multimedia sold only 41,800 LED TVs, accounting for only 9.7% of TCL flat-panel TVs' monthly sales. In September, TCL's LED TV sales have risen to 185,900, an increase of 345% in just two months. The proportion of total sales of TCL flat-panel TVs also rose to 18.9%.
Foreign frenzy
“Low gross margin has become a commonality in the color TV industry, especially domestic color TV manufacturers.†Huang Xinzhong, general manager of Marketing Division of Konka Multimedia Marketing Division admits that under the low-price strategy of foreign TV brands, domestic color TV manufacturers do face market share and profits. A dilemma. However, if the domestic color TV manufacturers do not transition to LED, but stay in the CCFL LCD TV (Editor's Note: LCD TV is divided into two categories of CCFL and LED, most of the traditional LCD TV CCFL), the product's gross margin will only be better than now Lower.
However, Konka Multimedia eventually chose to grab market share first.
"In the 15 days of the Mid-Autumn Festival and the National Day, Konka LED TV products have made a special price, especially the 32-inch Konka LED TV price is only 2799 yuan." Zhong Yi Kang analyst Peng Xiandong said that this price is equal to Sharp and Sony's CCFL LCD TV prices.
According to data from Yikang, in the second two weeks of September, Konka’s LCD TV share has successfully risen from fourth place to third place, second only to Hisense and Skyworth. And this small victory is undoubtedly based on the low gross margin of the product.
“At the beginning of this year, the share of domestic brands was still around 70%.†Zhao Maojun, deputy director of Ovid Consulting, pointed out that now Sharp's 32-inch CCFL LCD TV is priced at only 2,500 yuan, and the price is lower than the online price of Sony’s 2,699 yuan. Sharp LCD TV's domestic market share suddenly soared to 13%, compared with 7.6% in July, an increase of 5.4 percentage points.
According to data from Yikang, in late September, the top five best-selling models in 32-inch LCD TVs were all foreign brands, Light Sharp accounted for three models, and the best-selling models in 40- to 42-inch LCD TVs. Among them, Sharp, Sony and Samsung occupied the top three, and the other two were Konka and Hisense respectively.
"Because the economic environment in the United States and Europe has not improved as expected, foreign TV brands have concentrated a large amount of resources on the Chinese market and have caused a fierce price war." Yang Dongwen, president of Skyworth's color TV business division, told China Business News that foreign TV companies The madness of the brand is only a short-lived market behavior, which will put pressure on domestic brands in a short period of time and obtain a corresponding market size. However, domestic brands have successfully transformed LED TVs. “If you are still entangled in CCFL LCD TVs, domestic brands have no chance of winning.â€
Yang Dongwen pointed out that the current domestic LED TV market share has reached 50%, while the proportion of rural markets will rise to 50% next year. By then, the CCFL industry chain will quickly collapse and delist.
Upstream manufacturers decline
The crazy domestic flat-panel TV market is based on the decline in the upstream performance of the color TV industry.
Yesterday afternoon, the panel maker AU Optronics released a third-quarter financial report showing that in the third quarter, AUO’s revenue was NT$124.03 billion (approximately US$3.989 billion), a decrease of 3.3% from the previous quarter and a net profit of RMB 227 million. Taiwan Dollar (approximately US$7 million), a year-on-year decline of 97%. Yang Youyu, chief financial officer of AU Optronics, said that in the third quarter, customers' inventory adjustments led AUO's average panel price per square meter in the third quarter to decline by 6.5% from the second quarter.
LEDinside statistics also show that in September Taiwanese LED manufacturers listed companies’ total revenue was about NT$9.736 billion, a decrease of 8.1% from August. Among them, the total revenue of the LED chip factory in September was NT$4.554 billion, down 6.9% month-on-month; LED packaging manufacturers’ total revenue in September was NT$5.182 billion, a decrease of 9.1% from the previous quarter.
LEDinside analysts pointed out that the main reason for the decline in performance was: LCD TV makers are all digesting inventory.
Peng Xiandong disclosed that information obtained from panel makers such as Samsung and AUO showed that in the three months of July, August and September, the total number of panel purchases by domestic color TV manufacturers was only 30% in the first half of this year. In other words, domestic color TV manufacturers only made production capacity for the first half of the month in the first three months.
"The LCD TV inventory in the second quarter is a problem for the entire industry." Zhou Kun, deputy general manager of Nanjing Panda Electric Appliance Co., Ltd. disclosed that due to the reduction in purchase volume of domestic color TV manufacturers, AUO appeared on the stock of CCFL LCD panels in the third quarter, while Chi Mei Although LED screens have been transformed, there are also LED screen stocks, and Samsung and LG have also appeared inventories of LCD panels. Only Sharp successfully used its 20% reduction in panel production capacity to defuse the crisis. This is one of the reasons why Sharp LCD panel market share has soared recently.
Zhao Maojun pointed out that panel prices continued to decline, or the introduction of domestic color TV manufacturers strategic procurement behavior. Therefore, New Year's Day and the Spring Festival may also detonate the rural LED TV market. However, both Yang Dongwen and Huang Xinzhong revealed that domestic TV manufacturers are preparing for 3D TVs because there is an innovative film technology that is about to mature. The cost and price of 3D TVs will drastically drop. “3D TVs will be a chance for domestic TV makers next year.†.
On October 27th, Konka Group (000016.SZ) released its third-quarter financial report, showing that in the third quarter of this year, Konka Group's revenue was 4.541 billion yuan, a year-on-year increase of 17.84%, and it only achieved a Net profit of 10.29 million yuan, a substantial decrease of 60.94% year-on-year. In the first three quarters of this year, revenue was 12.482 billion yuan, a year-on-year increase of 38.29%, and net profit still showed the opposite trend. It was only 61,178,500 yuan, a year-on-year decrease of 42.63%.
“Foreign brands relied on upstream resources to impact the color TV market at low prices and grab market share of domestic brands.†Konka Group reluctantly stated in its financial report that although the company has been promoting LED TVs, the sales volume and sales of LED TV products are both higher than the same period of last year. With substantial growth, the product structure has been greatly improved, but it has also had to follow the low price of foreign capital, and the gross profit rate of products has been rapidly lowered. The financial report shows that Konka Group's consolidated gross margin in the third quarter was 15.17%, which was a decrease of 0.45 percentage points from the first-half gross profit rate of 15.62%.
The TCL Group (000100.SZ) is also affected by the difficulties facing the Konka Group. On October 22nd, TCL Multimedia (01070.HK), a subsidiary of TCL Corporation, issued a profit warning that intense market competition and clean up of LCD TV inventory in China and European markets have caused the gross margin of products to decline. The quarter and the first three quarters of this year will record losses.
What makes TCL Multimedia is that the loss of TCL Multimedia is based on the rapid increase in the proportion of LED TVs. In July, TCL Multimedia sold only 41,800 LED TVs, accounting for only 9.7% of TCL flat-panel TVs' monthly sales. In September, TCL's LED TV sales have risen to 185,900, an increase of 345% in just two months. The proportion of total sales of TCL flat-panel TVs also rose to 18.9%.
Foreign frenzy
“Low gross margin has become a commonality in the color TV industry, especially domestic color TV manufacturers.†Huang Xinzhong, general manager of Marketing Division of Konka Multimedia Marketing Division admits that under the low-price strategy of foreign TV brands, domestic color TV manufacturers do face market share and profits. A dilemma. However, if the domestic color TV manufacturers do not transition to LED, but stay in the CCFL LCD TV (Editor's Note: LCD TV is divided into two categories of CCFL and LED, most of the traditional LCD TV CCFL), the product's gross margin will only be better than now Lower.
However, Konka Multimedia eventually chose to grab market share first.
"In the 15 days of the Mid-Autumn Festival and the National Day, Konka LED TV products have made a special price, especially the 32-inch Konka LED TV price is only 2799 yuan." Zhong Yi Kang analyst Peng Xiandong said that this price is equal to Sharp and Sony's CCFL LCD TV prices.
According to data from Yikang, in the second two weeks of September, Konka’s LCD TV share has successfully risen from fourth place to third place, second only to Hisense and Skyworth. And this small victory is undoubtedly based on the low gross margin of the product.
“At the beginning of this year, the share of domestic brands was still around 70%.†Zhao Maojun, deputy director of Ovid Consulting, pointed out that now Sharp's 32-inch CCFL LCD TV is priced at only 2,500 yuan, and the price is lower than the online price of Sony’s 2,699 yuan. Sharp LCD TV's domestic market share suddenly soared to 13%, compared with 7.6% in July, an increase of 5.4 percentage points.
According to data from Yikang, in late September, the top five best-selling models in 32-inch LCD TVs were all foreign brands, Light Sharp accounted for three models, and the best-selling models in 40- to 42-inch LCD TVs. Among them, Sharp, Sony and Samsung occupied the top three, and the other two were Konka and Hisense respectively.
"Because the economic environment in the United States and Europe has not improved as expected, foreign TV brands have concentrated a large amount of resources on the Chinese market and have caused a fierce price war." Yang Dongwen, president of Skyworth's color TV business division, told China Business News that foreign TV companies The madness of the brand is only a short-lived market behavior, which will put pressure on domestic brands in a short period of time and obtain a corresponding market size. However, domestic brands have successfully transformed LED TVs. “If you are still entangled in CCFL LCD TVs, domestic brands have no chance of winning.â€
Yang Dongwen pointed out that the current domestic LED TV market share has reached 50%, while the proportion of rural markets will rise to 50% next year. By then, the CCFL industry chain will quickly collapse and delist.
Upstream manufacturers decline
The crazy domestic flat-panel TV market is based on the decline in the upstream performance of the color TV industry.
Yesterday afternoon, the panel maker AU Optronics released a third-quarter financial report showing that in the third quarter, AUO’s revenue was NT$124.03 billion (approximately US$3.989 billion), a decrease of 3.3% from the previous quarter and a net profit of RMB 227 million. Taiwan Dollar (approximately US$7 million), a year-on-year decline of 97%. Yang Youyu, chief financial officer of AU Optronics, said that in the third quarter, customers' inventory adjustments led AUO's average panel price per square meter in the third quarter to decline by 6.5% from the second quarter.
LEDinside statistics also show that in September Taiwanese LED manufacturers listed companies’ total revenue was about NT$9.736 billion, a decrease of 8.1% from August. Among them, the total revenue of the LED chip factory in September was NT$4.554 billion, down 6.9% month-on-month; LED packaging manufacturers’ total revenue in September was NT$5.182 billion, a decrease of 9.1% from the previous quarter.
LEDinside analysts pointed out that the main reason for the decline in performance was: LCD TV makers are all digesting inventory.
Peng Xiandong disclosed that information obtained from panel makers such as Samsung and AUO showed that in the three months of July, August and September, the total number of panel purchases by domestic color TV manufacturers was only 30% in the first half of this year. In other words, domestic color TV manufacturers only made production capacity for the first half of the month in the first three months.
"The LCD TV inventory in the second quarter is a problem for the entire industry." Zhou Kun, deputy general manager of Nanjing Panda Electric Appliance Co., Ltd. disclosed that due to the reduction in purchase volume of domestic color TV manufacturers, AUO appeared on the stock of CCFL LCD panels in the third quarter, while Chi Mei Although LED screens have been transformed, there are also LED screen stocks, and Samsung and LG have also appeared inventories of LCD panels. Only Sharp successfully used its 20% reduction in panel production capacity to defuse the crisis. This is one of the reasons why Sharp LCD panel market share has soared recently.
Zhao Maojun pointed out that panel prices continued to decline, or the introduction of domestic color TV manufacturers strategic procurement behavior. Therefore, New Year's Day and the Spring Festival may also detonate the rural LED TV market. However, both Yang Dongwen and Huang Xinzhong revealed that domestic TV manufacturers are preparing for 3D TVs because there is an innovative film technology that is about to mature. The cost and price of 3D TVs will drastically drop. “3D TVs will be a chance for domestic TV makers next year.†.
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