Absen R&D Building
The annual profit was 316 million yuan, a year-on-year increase of more than 50%, which is the same as that of Absen (300389. SZ) 2023 report card, and it is also the only company among the top six listed companies with LED screen display that has achieved double-digit growth in revenue and profit.
On April 15, Absen disclosed its 2023 full-year financial report. In 2023, Absen achieved operating income of 4.006 billion yuan, a year-on-year increase of 43.29%, net profit attributable to the parent company of 316 million yuan, a year-on-year increase of 55.53%, and non-net profit of 270 million yuan, a year-on-year increase of 70.66%.
Up to now, 5 of the top 6 companies in the LED screen display industry have disclosed their 2023 financial reports.
Overall, the differentiation trend of the LED screen display industry is becoming more and more obvious. Outstanding performers, such as Absen, have achieved high growth in revenue and net profit, while there are also those who have failed to deal with it, either with a decline in revenue and a loss of profit.
After more than 20 years of development, the LED screen display industry has been a red sea competition, the ceiling of the domestic market is approaching, and the competition between enterprises, especially the head enterprises, tends to be white-hot. In addition to relying on iterative innovation of technology, overseas markets have also become a battleground.
Looking at the industrial dynamics of the LED screen display industry, it is not difficult to find that the leading enterprises are increasing the layout and investment in overseas markets.
In 2024, the hottest economic phenomenon in China must be going overseas, including industrial chains such as automobiles and new energy, as well as entertainment such as social networking and games. Going to sea is a hot word that is being discussed in all walks of life.
But going to sea is not something that will only happen in 2024. As early as the 90s of the 20th century, representatives of China's manufacturing industry began to explore "going out".
For example, Midea Group, which started in Foshan, started its overseas strategy by investing in Vietnam to build a factory to produce home appliances in 2006. In the past 20 years, Midea, a former home appliance company, has become a representative of the world's advanced manufacturing industry, Midea Group, covering home appliance manufacturing, smart home, etc., and is also one of the business cards of China's manufacturing industry.
There is also the king of cars going to sea - BYD. Founded in 1995, BYD set up its first overseas branch in the Netherlands in 1998 at the request of customers, which was the beginning of BYD's global layout. Later, BYD went from the first in the consumer electronics industry to the road of automobile electrification, and then to the export of new energy vehicles, achieving today's king of going to sea.
The focus on the LED screen display industry is the pioneer Absen. Few people know that Absen is the earliest enterprise in the LED screen display industry to go to sea. When the LED screen display industry went overseas in 2012, Absen has been deeply cultivated overseas for 7 years, and has explored the overseas brand building, service center landing, channels and teams and other systems to go overseas.
And when most latecomers also begin to deploy globalization in 2023, Absen's 18 years of overseas experience, global layout strategy and localization experience have given the industry a lot of inspiration.
Emerging markets led the way in overseas revenue growth of 50%, leading the ROE industry
Although the LED screen display industry is improving, the high growth of Absen is not common in the industry.
Titanium Media App sorted out the performance of the top 6 listed companies in the LED screen display industry in the industry in 2023. As of April 22, five listed companies, including Absen, have released their annual financial reports.
Among these five companies, only three have positive revenue growth, of which only Absen has an operating income of nearly 50% year-on-year, and the other two have increased by less than 5%;
It is worth noting that from the perspective of ROE, Absen's profitability is stronger.
ROE is a key indicator to evaluate the investment value and profitability of a company, it represents the income created by each dollar of net assets, and a high ROE means that the company can achieve higher profitability and investment returns through the effective use of its own capital.
As shown in the chart below, Absen's profitability is relatively better than the industry average, with a net profit margin of 8.5% in the first three quarters of 2023, and a year-on-year increase of 56% in net profit last year, which also exceeded the industry average. According to the data, the company's weighted average return on equity in the first three quarters was 17.2%, which is also among the best in the industry.
As a screen display company that has been deeply involved in the overseas market for 18 years, Absen's overseas business in 2023 will be as good as ever: its market revenue will continue to grow by about 46% in 2023 on the basis of a high growth rate of about 76% in 2022, reaching about 2.6 billion yuan, accounting for about 65% of the total revenue.
In terms of revenue growth in various global markets, North America's revenue growth rate has declined slightly, but its revenue share is still as high as 14%.
In emerging markets such as South America and Asia, Absen's growth momentum is strong. According to the data, last year, Absen's revenue from Asia (outside China) and South America grew the fastest, increasing by 78.56% and 66.26% respectively, and the growth rate of European business also exceeded 50%.
Absen said that the revenue in various markets around the world continued to grow at a high rate, mainly due to the company's improved global sales network, and the signing and revenue continued to grow at a high rate. Last year, the company signed about 5.3 billion yuan including tax, a year-on-year increase of about 51%.
At present, Absen has about 6,000 global channel providers, with a year-on-year increase of 53% in the number of core channels, a year-on-year increase of 37% in the number of high-performance channels, and a year-on-year increase of 108% in channel signing. The number of orders signed in China increased by more than 100% year-on-year, and the number of orders signed in international channels increased by more than 70% year-on-year.
Mature markets look at increments, and emerging markets look at growth rates. It can be seen that Absen still maintains a steady growth rate in mature markets such as Europe and the United States. In the emerging markets of Asia, Africa and Latin America, Absen is also in a hurry.
"If you don't go to sea, you will be out" is the proposition of the times in the LED industry
At the beginning of 2024, when going overseas has become a hot topic in all walks of life, the LED screen display track where Absen is located has begun a new round of competition to go overseas.
For example, Leyard said that it will continue to increase investment in overseas markets, continue to expand Asia, Africa and Latin America, and improve the layout of the mid-to-high-end markets in Europe and the United States...... Gradually achieve the goal of increasing the proportion of Leyard's international business from 38% to 50% within three years.
Absen intelligent manufacturing workshop
Absen has put forward a more aggressive goal: to strive for 8 billion sales in 2024.
There are two reasons why the first-line LED screen display companies are aiming overseas?
First: from a global perspective, China's manufacturing industry is increasing. Made in China has been deeply involved in the competition in the international market, not only exporting Chinese products, but also exporting China's service system.
Take Absen, for example. At present, Absen has emerged in many sports events and large-scale events and city landmarks around the world, whether it is the stadium screen of the eight major venues of the Qatar World Cup, the LED floor screen of the NBA All-Star Game, the large screen of the League of Legends Global Finals, or the LED art installation screen of the Doha World Horticultural Expo, the stage screen of Weibo Night, and even the LED advertising screen of Times Square in New York, the advertising screen of Shenzhen Great China International Financial Center, The products and overall solutions such as the world's largest outdoor transparent screen in Thailand Central World Shopping Center have become overseas business cards made in China.
Second: In 2024, [growth] will still be the main narrative line of the LED screen display industry. How to tell a good growth story is a proposition that the screen display industry must answer.
First of all, in the fierce competition of domestic production capacity volume prices, [going to sea] is still one of the most certain growth paths for LED screen display. According to the statistics of the China Optical Association, the mainland LED industry has 20% of the total export volume every year. According to the data of the General Administration of Customs, the annual export value of LED displays in mainland China in 2023 will be about 10.254 billion yuan.
Going overseas is the only way for Chinese enterprises to go international. However, going overseas in 2024 is no longer the same as the export of products that everyone understood in the past.
Unlike the wave of globalization after the turn of the millennium, a significant feature of this round of overseas boom is that the innovation-driven economy represented by new technologies, new energy and new business forms is actively participating in global competition.
The end of the past is the beginning of the present. Nowadays, going global is only the first step, how to meet the needs of local products and service scenarios, and how to integrate into the local ecological legal compliance...... These finer granularities are testing our businesses.
In the LED screen display industry, the choice of overseas strategy and the deductive upgrade of the path are faster.
Take Absen, for example. Its 19-year path to sea can be roughly divided into the following four stages:
Absen's path to the sea is just the mainland LED industry as the representative of the overseas enterprises, from the early simple logic of "doing foreign trade and earning foreign exchange" to the solution of how to seek greater development opportunities overseas after forming a certain scale:
First of all, in terms of product strategy, from following to leading. After years of development, the technological iteration speed of the LED screen display industry in China is generally ahead of foreign countries. Today, including OEM production, basically 90% of the world's LED display products are from China. However, based on the advantage of low cost and low price, many companies still have the idea of foundry.
Absen, by contrast, has gone the extra mile. Among the global LED display providers, Absen is one of the companies with the most comprehensive product category layout. For global customers in various scenarios (advertising display, stage display, commercial display, data visualization, conference display and home theater display, etc.), there are corresponding product portfolio matching needs, and professional industry audio-visual solutions can also be provided for some special scenarios.
Secondly, in terms of market selection, it is advantageous to take advantage of the situation. In terms of the selection of overseas markets, Absen has formed a relatively complete global layout from the high-end markets in the Middle East, North America and Europe, and now to the mid-end and cost-effective markets such as Asia, Africa and Latin America. With nearly 20 years of overseas layout, Absen has also formed a unique global market competitiveness. Up to now, Absen has 18 domestic and foreign companies, formed about 6,000 channel partners in more than 140 countries and regions, and more than 60,000 product application cases.
Absen global layout
Finally, in terms of organizational capabilities, the combat capability of the system should be adjusted in a timely manner according to the changes of the enterprise. At present, the common problem faced by LED screen enterprises is not in the product or in the channel, but the core is whether the organizational ability can keep up with the pace of global expansion.
Studies have shown that when the proportion of overseas business exceeds 10%, it faces all-round challenges from risk control and compliance, cultural differences, difficult management and control, and slow decision-making, and needs to meet the dual requirements of expansion and capacity building. In order of urgency, overseas business strategy, supply chain, ecosystem and partners, data analysis and decision-making, talent and organization, global control and operations, and risk and compliance are the most urgent issues to be solved.
From initial localization, comprehensive localization to multi-integration capability localization, Absen completely presents the methodology of overseas enterprises in organizational capability building.
Today, Absen has built a headquarters platform + 9 global service centers, 700+ service partners in 6 continents and more than 60 countries around the world, providing 7*24 hours of professional services, and realizing the industry's first ACE engineer training program, and completing a total of 3000+ ACE service engineer certifications.
Absen's example shows us that in order to become a truly global company, it is necessary to be fully localized. Because the creation of localized operation capabilities including enterprise products, services, and channels is the underlying operating ability under the iceberg. Moreover, this localized operation capability has played a decisive role in the overseas business expansion and acquisition of benchmark projects of overseas enterprises.
From October 2, 2023 to March 28, 2024, during the World Horticultural Expo in Doha, Qatar, the LED art installation created by Absen PL series products became a highlight of this World Expo, and the large screen of Absen Doha World Expo in Qatar won the Guinness Book of World Records.
In addition, Absen also carefully built the world's largest outdoor transparent screen for Thailand Central World Shopping Center, the largest comprehensive leisure shopping center in Southeast Asia, with high contrast, high brightness, high-definition picture quality, weather resistance and stability, energy saving and environmental protection performance, creating a unique atmosphere for the shopping center and enhancing the image of the city.
Why are these companies willing to trust Absen and choose Absen? The answer is self-evident.
In 2023, when the differentiation is accelerating, Absen will further increase its international and domestic market share. According to the research report of Omdia, the Absen brand ranks first with a market share of 16.2% in the global LED display brand shipment ranking in 2023.
According to TrendForce's research, the global LED display market will bottom out and rebound, reaching US$7.564 billion in 2023, with a year-on-year increase of 8% in sales value, and a greater increase in sales area.
While the market is improving, Absen's "hurricane" continues. According to the forecast of Absen's first quarterly report, the company will sign orders of 1.203 billion yuan in the first quarter of 2024, an increase of 26.90% compared with the first quarter of 2023.
Absen COB workshop
Absen said in the annual report that the company has formulated a strategic development plan outline for 2023-2025: "double attack both internally and externally, control the rhythm, take brand, channel, product and organization as the four major starting points, efficiently promote the implementation of BP, and steadily achieve the phased strategic goal of 10 billion yuan in three years". In the plan, Absen set the signing target of 8 billion yuan in 2024 and 10 billion yuan in 2025.
In 2024, the LED screen display industry will begin to roll out of the sea in the era of exploration, and the biggest suspense of Absen, which was the first to go to sea, may be whether the Asian, African and Latin American markets can replicate the sales myth of the past?