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in the more than 20 years from the millennium to 2023, konka group's operating income has remained stagnant in the 10 billion yuan range, with almost no eye-catching improvement. but in the turbulent and ever-changing business world, konka's continued survival is also a "miracle" of some size.

text｜zhang ruowang

"in 1979, it was a spring day. an old man drew a circle on the south china sea. cities rose up like myths, and mountains of gold gathered like miracles..."

in the song "spring story", which is full of beautiful melodies, konka group witnessed the magnificent process of china's reform and opening up. on april 2, 1979, guangdong overseas chinese enterprise company and hong kong hong kong electronics enterprise co., ltd. established a joint venture company, guangming overseas chinese electric factory, which was located in guangming overseas chinese farm in bao'an county at that time. on december 25, guangdong guangming overseas chinese electronic industrial company was established. this is the predecessor of konka group and the first sino-foreign joint venture electronics company born after the reform and opening up in the 1980s.

two years later, a college student named chen weirong joined konka. he started from the grassroots level and gradually rose to become the group president as konka group developed. in 1992, konka a and konka b were listed on the shenzhen stock exchange at the same time.

in 1999, konka group developed the first high-definition digital tv in china with independent intellectual property rights. relying on independent intellectual property rights, konka rapidly expanded its production capacity, but due to sales not meeting expectations, it suffered losses. in 2001, chen weirong announced his resignation amid losses.

but soon, konka group "turned around". this year, changhong entered the us market, but due to long-term overdue payments from customers, changhong fell into a quagmire of losses. tcl and skyworth also had operational problems. therefore, skyworth quickly turned around by relying on high-definition lcd tvs and achieved a record of winning the top sales in the chinese color tv market for five consecutive years from 2003 to 2007.

"digital intelligence research society" found that konka's operating income has exceeded 10 billion since the beginning of the 21st century. by 2023, konka's operating income will be fixed at 17.85 billion yuan. for more than 20 years, konka group has been standing still and has not developed. but in the ever-changing and turbulent business world, konka's ability to survive may be regarded as a "miracle" of some size.

total defeat

back then, television was very important to every family. it was not an exaggeration to call it the "protagonist" in every family's living room. at that time, television programs were also the main carrier and channel for the dissemination of industry information. news broadcast, animal world, quyuan zatan and spring festival gala have all become absolute ips in people's hearts after years of hard work.

behind this is the rapid development of the television industry. from black and white tvs to color tvs, and then to lcd tvs, internet tvs, etc., players are constantly emerging in the industry, including skyworth, changhong, konka, hisense, and tcl. the flags on the city walls are constantly changing.

the times are progressing. with the continuous iteration and development of the internet and the continuous updating of mobile devices, television has gradually lost its status as the "protagonist" in the family, and has been replaced by mobile phones and projectors.

in 2023, the national sales of color tvs will be only 31.42 million units, a year-on-year decrease of 13.6%. "digital intelligence research society" found that in 2002, the total production of color tvs in china reached 51 million units, with sales reaching 53.53 million units. in 21 years, the national sales of color tvs have shrunk by 20 million units. by 2024, the national retail sales of color tvs may face the risk of falling below 30 million units.

the market is shrinking, and the players who once took turns to become the "color tv king" have to adjust their strategies in terms of products, technology, marketing, etc.

among them, tv brands such as hisense, tcl and skyworth are vigorously sailing overseas, hoping to eat into the market share of samsung and lg in the global market. in terms of performance, tcl electronics' adjusted net profit in the first half of the year increased by 147.3% year-on-year to hk$650 million.

relying on the european cup and the olympic games, hisense visual's revenue in the first half of the year increased by 2.36% to 25.46 billion yuan, but its net profit decreased by 19.56% to 834 million yuan. changhong's net profit attributable to its parent company increased by 38.71% to 280 million yuan in the first half of the year. skyworth's net profit attributable to its parent company reached 384 million yuan, a year-on-year increase of 27.2%.

in comparison, konka group achieved revenue of 5.413 billion yuan in the first half of the year, a year-on-year decrease of 48.31%; the net loss attributable to the parent was 1.088 billion yuan, and the loss expanded by 462.81% year-on-year.

as the entire black-and-white electronics industry shrank, konka group fell behind in the fierce internal competition and became the "second monitor" of the black-and-white electronics industry. konka group has tried to transform, but it has not made a real breakthrough. in the overall downturn of the environment, konka group's collapse is more severe than ever before.

transformation is difficult

poor performance has plagued konka group for several years.

after setting a sales record of 50.89 million units in 2016, the sales volume of color tvs in china fell to 47.52 million units in 2017. this year, konka group realized that it had to transform. this year, konka group tried to get rid of its single reliance on color tv products and actively sought a second business curve.

for the color tv business, konka group operates it as an independent company. as a result, the revenue share of the color tv business has dropped from more than 40% in 2016 to about 26.4% in 2023. however, in the first half of 2024, this share has returned to 39.1%.

after operating the color tv business independently, konka group began to expand into the fields of health, finance, new energy, etc., hoping to find a second growth curve. in 2018, konka group established konka chip technology co., ltd. to officially enter the field of chip research and development. the following year, it invested 1.08 billion yuan to build a packaging and testing plant in yancheng city, jiangsu province.

it is worth noting that konka group's revenue only hit a record high in 2019, three years later than the record high of the color tv market. during these three years, konka group has made many attempts, and mobile internet, venture capital, semiconductors and white goods businesses have all entered konka group's vision. however, in the state of active transformation, most businesses are "lit up and gone", which looks very lively, but in fact looks more like self-entertainment, and basically failed to establish a solid foundation in the industry.

the transformation was not successful, but the money was spent. the shenzhen stock exchange's inquiry letter shows that from 2019 to 2023, konka group has set aside nearly 5 billion yuan in impairment provisions each year. with such a transformation, it would be strange if konka group did not fall behind.

from 2020 to 2023, konka group's revenue has been on a "slide" going down. in four years, it fell by 8.65%, 2.47%, 39.71% and 39.71% respectively. in the first half of 2024, revenue fell by 48.13% year-on-year, showing a trend of further expansion. the semiconductor memory chip business, which has been invested for many years, had revenue of less than 83 million yuan in the first half of the year, a sharp drop of 95.9% compared with last year, accounting for only 1.5% of revenue, which can not be relied on at all.

as the company continues to decline, it will still be difficult for president zhou bin to replace liu fengxi as chairman of the board of directors in order to reverse the unfavorable situation of konka group in its forties.