Wen 丨 Melt Finance, author 丨 Wang Xun
On October 10, Jingdong Changhong dealers issued an announcement in the store, which roughly means: October 8 was maliciously deceived by a promotion agency, in a short period of time, Changhong Kettle was auctioned at a price far below the cost of 200,000 orders, causing huge losses to the company, facing bankruptcy and closure, the company's employees will also face unemployment, hoping that those users who have placed orders can raise their hands and cancel orders.
When the author landed on the flagship store on the 23rd, the store was still open and participated in the Double Eleven activity normally, and the attention of the store also rose to 73,000 in the first 72,000 people. For a time there were many opinions.
However, if there is no dealer being wool incident this time, Changhong, a brand that is both familiar and unfamiliar, may not be in everyone's attention again.
Changhong's predecessor is a military enterprise founded in 1958, in the context of the transformation of military industry into civilian needs, began to produce civilian home appliances, that generation has a unique emotion for the word "military", Changhong TV has always been known for its "military" quality, has accompanied a lot of childhood after 7080. In the 1990s, Changhong ascended to the hegemony of China's television industry, and one out of every three TVs in the Chinese market that year was Changhong's. At one point, the market share reached 37%.
<h2>There is no way to go away</h2>
According to IHS Markit's 2018 top ten TV brand ranking data, Skyworth, Xiaomi, and Hisense ranked in the top three, all occupying more than 10% of the market share, while Changhong only occupied 7.4% of the market share, which was squeezed out of the top five.
The downturn in Changhong's TV business is only a microcosm of its decline. The former "TV brother" is now "dying of old age", with revenue of 88.793 billion yuan in 2019, which looks good, but it is a bit unbearable to see the profit when it is unveiled: the net profit attributable to the shareholders of the listed company is 0.61 billion yuan, a year-on-year decrease of 81.3%.
Changhong financial report in the decline in electrical appliances revenue attributed to "by the macroeconomic downturn, demographic structure and changes in consumption behavior, changes in the industry competition pattern and other factors, the overall scale of the home appliance industry growth slowed down", the general environment, indeed these years of home appliances recession, but the same is the home appliance field "old man" Hisense, from the time of establishment (Hisense was established in 1969), the "old man" who is nearly a flower armour, but lived out the feeling of prime-age, the performance is all the way up, the total revenue in 2019 reached 126.8 billion yuan , profit of 7.93 billion.
"How do you go anywhere, the environment is not good", in this set of Zhao Benshan's words is quite appropriate.
The same is a well-known brand, the same is the old state-owned holding company, whether from the company's management, or the profitability of the product, Changhong and Hisense, Gree and other old electrical companies have not been in the same competition grade, 2013, 2014 Gree, Hisense has stepped into the 100 billion club, as if crossing the torrent began to run all the way; history seems to have made a joke with Changhong, just began in 2014, the fate of the three crossed, Changhong is no longer "long red", 2015 loss of nearly 2 billion, In 2016, in order not to be suspended, he ruthlessly sold his real estate assets to make a profit.
In recent years, government subsidies have been obstacles that Changhong cannot avoid.
In 2019, Changhong received a total of 278.0165 million yuan in government subsidies, accounting for 61.04% of the company's latest audited net profit, which means that at least for more than a year, half of the profits on Changhong's books came from government subsidies.
It is not shameful for high-tech companies to receive government subsidies, and even the recognition of strength, but it is difficult to look at the excessive dependence on eating images, and Changhong happens to be the latter.
Previously, Changhong even had a "fraudulent compensation" incident, in 2015, Changhong received a notice from the local financial department of Mianyang (where Changhong's headquarters is located) on the return of nearly 440 million yuan of energy-saving home appliances (flat-screen TV) promotion subsidy liquidation funds. According to the financial data released by Changhong, in 2015 and 2014, Changhong lost 1.68 billion yuan and 480 million yuan respectively after deducting non-deductions, and received subsidies of 260 million yuan and 240 million yuan in the past two years. It can be seen that relying on government subsidies to increase profit figures is ultimately an unsustainable way.
At its peak, the market value of Sichuan Changhong reached 58 billion, and now it has fallen to 13.4 billion (as of October 20), which is really lamentable.
<h2>Stalling in a big gamble</h2>
"Innovation has risks and costs," Zhao Yong, former chairman of Changhong, said in an interview with Sichuan Economic Daily. Looking back at the development of Changhong over the years, technological innovation has dragged it into a deep pit, and Zhao Zhangmen's words have a deep meaning.
In 2006, the color TV industry is facing the three forks in the road from the picture tube to plasma, LCD TV upgrade, plasma panel color, contrast, dynamic range compared to the LCD advantages are obvious, but its volume, power consumption is at a disadvantage, Changhong chose the investment direction is plasma screen, throw 2 billion US dollars, will be South Korea's Orian plasma company into the pocket, and then invested 720 million yuan, in 2007 set up Sichuan Hongou Display Device Co., Ltd., mainly the production of plasma panels. However, in the fourth quarter of 2006, the LCD camp took the lead in making technological breakthroughs, and the volume, power consumption and cost were significantly ahead of plasma, and Philips, Sony and other manufacturers have switched to the LCD camp.
Peng Yu, market research director of Zhongyikang, once gave a data that in 2004, the annual sales of domestic plasma TVs and LCD TVs were 500,000-600,000 units, but since then LCD TV sales have risen all the way. By 2010, LCD TV sales had reached 34.51 million units, while plasma TVs had sold only 1.61 million units.
By the end of 2013, Changhong's investment in Hongou reached 1.72 billion yuan, but the result was a series of losses. According to the financial data disclosed by Hongou, from December 31, 2011 to August 31, 2014, the company's assets and liabilities changed from RMB4.954 billion and RMB3.421 billion to RMB3.992 billion and RMB3.889 billion, respectively.
The market chose liquid crystal, and Changhong also used nearly 10 years to prove that he made a wrong gamble. In 2014, Changhong sold 61.48% of the equity of Hongou Company for 64.2 million yuan, and at this point, Changhong gambled on plasma screens and ended in complete failure.
<h2>Changhong of "not doing the right thing"</h2>
Changhong's ambitions are very large, but it has never found a product suitable for itself, the advantages of the old bank's color TV have become weak, and the competitiveness of other businesses is also very small.
Changhong entered the mobile phone industry in 2005 and can be said to be the elder of the industry. That year, Huawei was still helping operators produce customized machines, Meizu was still doing MP3, and Changhong had begun to invite Miss Lin Chiling to endorse the mobile phone, but when the smartphone broke out, Changhong did not react quickly. Until 2015, in order to rub the heat of the Internet of Things, the hindsight Changhong began to release its first 4G mobile phone H1, focusing on the concept of the Internet of Things.
Liu Tibin, general manager of Changhong Company, expressed his confidence in the market at the press conference, "Changhong mobile phone will definitely be able to seize the wind outlet of the Internet of Things era, achieve bottoming out, and win the market again", but this mobile phone did not stir up many waves.
However, the wind of the Internet of Things has not yet blown, and Changhong itself has gone first.
In 2017, Changhong H2 launched, positioned as a personal health wisdom management terminal in the era of artificial intelligence, a molecular identification mobile phone with intelligent functions, fruit and vegetable sugar, moisture, drug authenticity, skin age, alcohol quality and other testing, however, this series of mobile phones is also very "short-lived", in 2018, the blockchain concept is very popular, Changhong turned to launch the R8 Kirin mobile phone, the main blockchain concept, but only one year, the 2019 financial report has no trace of these mobile phones. Another chicken feather.
In June this year, Changhong disclosed an announcement that the company's land resources of about 589 mu were injected into the project company Mianyang Shangcheng Real Estate Co., Ltd. (hereinafter referred to as "Shangcheng Real Estate"), and then publicly listed and transferred 100% of the equity of Shangcheng Real Estate, with a valuation of nearly 5 billion.
<h2>Changhong has also entered the real estate industry? </h2>
In fact, as early as 2005, Changhong set up a subsidiary Changhong Real Estate Co., Ltd., layout real estate, in 2007 to dig up the former head of Vanke Beijing Wu Youfudang general manager, to science and technology parks, research and development centers, quickly in the country to attack the city, in 2008 and even once became the three main businesses juxtaposed with electronics and military industry.
The real estate business unit is one of the few high-quality assets of Changhong, and its real estate business operating income in the first half of 2016 was 432 million yuan, with a gross profit margin of 29.01%, compared with only 15.83% of its main business home appliances. However, the proportion in the entire system is too small, accounting for 1.3% of its total revenue, and when there is a sharp decline in performance, it often assumes the role of "jianghu emergency" tearfully selling buildings.
In September 2016, the 49th meeting of the 9th Board of Directors of Changhong approved the "Proposal on the Transfer of Shanghai Changhong Building by the Company": "In order to further improve the efficiency of the company's asset utilization, save management costs, and revitalize existing assets, the company agreed to publicly transfer Shanghai Changhong Building".
"Melt Finance" saw that until the end of 2018, in order to "save" the financial report, the building was finally sold, but the market value of 150 million only sold 81 million, and the actual income shrank by nearly half.
<h2>Déjà vu swallow returns</h2>
Sichuan Changhong said in its 2018 semi-annual report: "The company will accelerate the pace of industrial optimization and decisively stop bleeding and losses." In the color TV market, Changhong has chosen the segmented product laser TV as a new growth engine.
The national policy also attaches great importance to the development of the laser display industry, and the "13th Five-Year Plan" lists laser display as the first place of the new generation of information technology display projects.
According to Zhongyikang data, from 2014 to 2019, the compound annual growth rate of laser TVs reached 281%, and sales are expected to exceed 10 billion yuan in 2022. Compared with the growth of other color TVs in the same period, laser TV can be described as a high-speed train.
In 2018, Changhong launched the world's first tri-color 4K laser TV and Fresnel optical sound screen, taking the lead in achieving first-class energy efficiency;
In 2019, the three major laser TV brands of Changhong, Hisense and PPTV joined hands with Suning to launch the "2019 Laser TV Living Room Renewal Action", announced a strategic cooperation and signed a large sales order of 100,000 units of Suning channels in 2019.
"Laser TVs have differentiated usage scenarios, which can meet the needs of home-level and cinema-level consumers, and will coexist with LCD TVs for a long time in the future." Dong Min, vice president of Aowei Cloud Network, believes that Changhong may be able to take the lead in a new round of display industry competition in advance.
Now, with the tide of 5G and 8K rolling in, what kind of spark will the TV industry have? I am looking forward to Changhong being able to play a beautiful turnaround battle in the main business.