New concept TV hits traditional TV industry for the first time in 30 years

Industry fatigue appears

In the industry's view, the growth momentum of the color TV industry has shown signs of weakness with the withdrawal of national trade-in and energy-saving subsidies. In the context of the weak real estate market, the decline in consumer confidence, and the lack of state subsidy policies in 2014, the color TV industry has already entered the most difficult year in history. The cross-border brands of Internet companies have further competed in the color TV industry.

On October 20, Sichuan Changhong (600839, SH) released its third quarterly report that disclosed operating income of 41.285 billion yuan in the first three quarters of 2014, down 1.82% year-on-year; net profit loss of 314 million yuan, down 201.28% year-on-year; after deducting non-recurring gains and losses The net profit loss was RMB 619 million, a year-on-year decrease of 336.66%.

Subsequently, Hisense Electric (600060, SH) three quarterly report shows that in the first three quarters of income 21.09 billion yuan, an increase of 2%, to achieve the net profit attributable to shareholders of listed companies 920 million yuan, down 18% year-on-year. In the third quarter, the single-quarter revenue increased by 11%, and the net profit attributable to the parent company fell by 3%.

The TCL Group's (000100, SZ) quarterly report shows that from January to September, operating income totaled 69.21 billion yuan, an increase of 13.3% year-on-year, of which net profit attributable to shareholders of listed companies was 2.22 billion yuan. The growth was mainly from Huaxing Optoelectronics and TCL Communication Technology’s smart phones. The total sales revenue of TCL Multimedia Electronics, which is the color TV business, was RMB 18.71 billion, which was a decrease of 16% year-on-year. Affected by the weak domestic market demand, TCL Multimedia Electronics completed sales revenue of 11.73 billion yuan in the Chinese market, which was a decrease of 28.3% year-on-year.

Referring to the shrinking of the color TV market this year, there are three main reasons in the view of Liubu Chen: Liu Shichen, the producer and commentator, first of all, LeTV and other new concept TV companies continuously launched a price war, drastically driving down the average price of TV products. This is the profitability of color TV companies. The biggest reason for the sharp decline; Second, the rapid development of mobile Internet, so that smart phones, tablet PCs become the best tool for the public to access information anytime, anywhere, the public is more dependent on mobile phones and tablets, especially mobile phones, the more demand for television Weakness has affected TV companies' revenues; once again, the rapid development of the Internet video industry has gradually weakened the unity of information that can only be acquired by TV stations, indirectly affecting TV sales and revenue.

Still difficult next year

It is worth noting that on November 24th, Skyworth Digital (00751, HK) released its interim results for the six months ended September 30, 2014. Its group's turnover was HK$18.878 billion, which was a decrease of 7.7% year-on-year; net profit was 842 million Hong Kong dollars, a year-on-year increase of 14.6%.

Regarding the large difference between Skyworth Digital's profitability and other color TV companies, Liu Buchen pointed out to the reporter of “Daily Economic News” that Skyworth’s wise point is that it actively promotes high-end products, so its earnings performance is relatively good.

According to the reporter’s understanding, Skyworth recently launched a TV that is 0.28mm thinner than the mobile phone, namely Skyworth GLEDAir. Senior person BobLee expressed that the current color TV industry has encountered bottlenecks and that market competition is so fierce. In order to respond to the fierce price war, companies can only ensure the profitability of their products by selling high-end products.

In the color TV industry, the “price war” has become the usual way to save the company’s performance. It is reported that during the "Double Twelve" period of Suning, the 32-inch color TV has been hovering around 1,000 yuan. Compared with the situation of five years ago, the price of the 32-inch color-screen electric rammer was 5,000 yuan. If the horizontal comparison, a 50-inch smart TV price is only half of a 4.7-inch iPhone 6, color TV prices can be said to have been reduced to "cabbage price."

Fan Zhijun, vice president of Suning Yunshang and general manager of Shanghai Suning, said that in order to help upstream companies to destock and boost market confidence at this stage, the “price war” approach is needed.

This year's first negative growth in color TV, it is predicted that this trend will continue until next year. According to AVC's forecast, China's color TV sales will reach 44.29 million units next year, down 1.8% year-on-year.