In the face of the low-cost butcher's knife collectively represented by the color TV brands represented by Sharp and Sony, domestic color TV manufacturers have suddenly fallen into the dilemma of market share or profit.
On October 27, Konka Group (000016.SZ) released its third-quarter earnings report. In the third quarter of this year, Konka Group's revenue was 4.541 billion yuan, a year-on-year increase of 17.84%. It only achieved a net profit of 10.29 million yuan, a significant decrease of 60.94% year-on-year. In the first three quarters of this year, the income was 12.482 billion yuan, a year-on-year increase of 38.29%. The net profit still showed the opposite trend, only 61.178 million yuan, a year-on-year decrease of 42.63%.
“Foreign brands rely on the advantages of upstream resources to impact the color TV market at low prices and seize the market share of domestic brands.†Konka Group said in its earnings report that although the company vigorously promoted LED TVs, LED TV products sales and sales were higher than the same period last year. There has been a substantial increase, and the product structure has been greatly improved, but it has to follow the low-cost foreign capital, and the gross profit margin of the products has been rapidly lowered. According to the financial report, the overall gross profit margin of Konka Group in the third quarter was 15.17%, which was 0.45 percentage points lower than the 15.62% gross profit margin in the first half of the year.
The difficulties faced by Konka Group, TCL Group (000100.SZ) also felt the same. On October 22nd, TCL Multimedia (01070.HK), a subsidiary of TCL Group, issued a profit warning that the fierce market competition and the inventory of LCD TVs in China and Europe were cleaned up, resulting in a decline in gross profit margin. The quarter and the first three quarters of this year will record a loss.
What makes TCL Multimedia awkward is that the loss of TCL Multimedia is based on the rapid increase in the proportion of LED TVs. In July, TCL Multimedia's LED TV sales volume was only 41,800 units, accounting for only 9.7% of TCL flat-panel TV monthly sales; in September, TCL's LED TV sales volume has risen to 185,900 units, an increase of 345% in just two months. The proportion of total monthly sales of TCL flat-panel TVs also rose to 18.9%.
Foreign capital madness
"Low gross profit margin has become the commonality of the color TV industry, especially domestic color TV manufacturers." Huang Xinzhong, general manager of the marketing department of Konka Multimedia Marketing Division, acknowledged that under the low price strategy of foreign color TV brands, domestic color TV manufacturers do face market share and profits. A dilemma. But if domestic color TV manufacturers do not switch to LED, but stay in CCFL LCD TV (Editor's Note: LCD TV is divided into CCFL and LED categories, traditional LCD TVs are mostly CCFL) products, its product gross margin will only be better than the current Lower.
However, Konka Multimedia finally chose to grab market share first.
"In the 15 days of the Mid-Autumn Festival and National Day, Konka LED TV products have made special prices, especially the 32-inch Konka LED TV price is only 2799 yuan." Zhong Yikang analyst Peng Xiandong said that this price is almost equal to Sharp and The price of Sony's CCFL LCD TV.
Zhongyikang data shows that in the last two weeks of September, Konka LCD TV market share has successfully risen from the fourth place to the third place, second only to Hisense and Skyworth. And this small win is undoubtedly based on the low gross profit margin of the product.
"At the beginning of this year, the domestic brand share is still around 70%." Zhao Weijun, deputy director of Aowei Consulting, pointed out that the price of the 32-inch CCFL LCD TV is only 2,500 yuan, and the price is lower than the online price of Sony 2699 yuan. The domestic market share of Sharp LCD TVs soared to 13%, an increase of 5.4 percentage points compared with 7.6% in July.
According to Zhongyikang's data, in late September, the top five best-selling models in 32-inch LCD TVs are all foreign brands, and Light Sharp has three models; five best-selling models in 40-42-inch LCD TVs. Among them, Sharp, Sony and Samsung occupy the top three, and the other two are Konka and Hisense.
"Because the economic environment in the United States and Europe has not improved as expected, foreign-funded color TV brands have concentrated a large amount of resources on the Chinese market, causing a fierce price war." Yang Dongwen, president of Skyworth Color TV Business Division, told the "First Financial Daily" that foreign-funded color TVs The brand's madness is only a short-term market behavior, which will put pressure on domestic brands in a short period of time and obtain the 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."
Yang Dongwen pointed out that the LED TV market share in the central cities of China has reached 50%, and the proportion in the rural market will rise to 50% next year. By then, the CCFL industry chain will collapse rapidly and delist.
Upstream manufacturers decline
The domestic flat-panel TV market is crazy, but it is based on the decline in the upstream performance of the color TV industry.
On the afternoon of the 27th, the third quarter financial report released by panel maker Taiwan AU Optronics showed that AUO's revenue in the third quarter was NT$124.03 billion (approximately US$3.989 billion), a decrease of 3.3% from the previous quarter and a net profit of 227 million yuan. New Taiwan dollar (about 7 million US dollars), down 97% year-on-year. AUO's chief financial officer Yang Benyu said that in the third quarter, customers adjusted their inventory, resulting in AUO's average selling price per square meter in the third quarter fell 6.5% from the second quarter.
LEDinside statistics also show that the total revenue of Taiwan's LED manufacturers listed in September was about 9.736 billion Taiwan dollars, a decrease of 8.1% from August. Among them, LED chip factory's total revenue in September was 4.554 billion Taiwan dollars, down 6.9% from the previous month; LED packaging manufacturers' total revenue in September was 5.182 billion Taiwan dollars, a decrease of 9.1% from the previous month.
LEDinside analysts pointed out that the main reason for the decline in performance is that LCD TV manufacturers are digesting inventory.
Peng Xiandong revealed that information obtained from panel makers such as Samsung and AUO showed that in the three months of July, August and September, the total purchase volume of domestic color TV manufacturers was only 30% in the first half of this year. In other words, domestic color TV manufacturers only made one month of production capacity in the first half of the year.
“The LCD TV inventory in the second quarter is a problem for the entire industry.†Zhou Kun, deputy general manager of Nanjing CLP Panda Appliances Co., Ltd. revealed that due to the reduction in purchases by domestic color TV manufacturers, AUO’s inventory of CCFL LCD panels appeared in the third quarter, while Chi Mei Although the LED Screen has been transformed, and the inventory of LED screens has appeared, Samsung and LG also have corresponding LCD panel inventory. Only Sharp's successful use of reduced production capacity of 20% panel production has resolved the crisis, which is one of the reasons for the recent surge in Sharp's LCD panel market share.
Zhao Maojun pointed out that the panel price will continue to be lowered, or the strategic purchasing behavior of domestic color TV manufacturers will be introduced. Therefore, New Year's Day and the Spring Festival may also detonate the rural LED TV market. However, Yang Dongwen and Huang Xinzhong both revealed that domestic color TV manufacturers are preparing for 3D TV, because there is an innovative film technology that is about to mature, and the cost and price of 3D TV will be greatly dived. "3D TV will be the opportunity for domestic color TV manufacturers next year." .
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