TCL Group released a semi-annual report on August 24th. In the first half of 2016, due to the decline in LCD panel prices and the decline in profits of TCL mobile phone business, the net profit attributable to shareholders of listed companies of TCL Group fell 62.6% year-on-year to 606 million yuan.
However, TCL Group's operating income in the first half of this year still increased by 3.55% year-on-year to 48.342 billion yuan; of which, the overseas main business income was 22.4 billion yuan, an increase of 3.19% year-on-year, and the growth rate was higher than the domestic main business. Moreover, TCL Financial Holding Group achieved a net profit of 467 million yuan in the first half of the year, a year-on-year increase of 43.1%, becoming an important profit growth point.
More striking is that TCL Group is suspending trading to plan major asset restructuring. Industry speculation is likely to be related to the 11th generation LCD panel production line in Shenzhen, and does not rule out the possibility of restructuring with Shenzhen Textile. Guoyuan Securities believes that considering the second quarter results rebounded from the previous quarter, the future impact on the TCL Group's share price is greater than the restructuring rather than the semi-annual report.
Panel price rebound led to a rebound in Q2 net profit
As one of the major panel manufacturers in China, Huaxing Optoelectronics has been the profit cow of TCL Group in recent years. However, the panel industry began to oversupply in the third quarter of last year, causing prices to fall. Until the first quarter of this year, prices fell to the bottom, which became one of the important reasons that affected the net profit of Huaxing Optoelectronics and TCL Group in the first half of this year.
From January to June this year, Huaxing Optoelectronics achieved sales revenue of 9.08 billion yuan, a year-on-year increase of 11.2%; net profit of 559 million yuan, down 54.9% year-on-year.
Fortunately, in the second quarter, the panel industry rebounded. Samsung's closure of a seven-generation line, Taiwan's Group's shipments affected by the earthquake and the trend of large-scale TV, the panel supply is in short supply, prices have rebounded, and the price of 32-inch panels has risen from about 50 US dollars to about 70 US dollars. This caused Huaxing Optoelectronics' net profit in the second quarter to increase by 78.1% to 358 million yuan in the first quarter.
Affected by this, TCL Group achieved a net profit of 345 million yuan attributable to shareholders of listed companies in the second quarter, an increase of 32.4% over the first quarter, and improved profitability. As the panel prices remain rising in the third quarter of this year, it is expected that the performance of Huaxing Optoelectronics will continue to improve.
In addition to the 8.5-generation line of two TV LCD panels produced in Shenzhen, at the beginning of this year, Huaxing Optoelectronics launched a 6-generation line (t3 factory) that mainly produces mobile phone panels in Wuhan. Currently, the t3 factory has introduced 5.5-inch and 5.2-inch full HD, narrow bezel panels and entered the verification phase. For the small-size panel OLED trend, Huaxing Optoelectronics conducted the OLED product technical verification and mass production technology verification in the 4.5-generation experimental lines in Shenzhen and Wuhan, and prepared the technology for flexible products.
Color TV mobile phone net profit pressure white light performance improvement
TCL Group's other two main color TVs and mobile phones, although the product structure is optimized, but the net profit in the first half of the year is still under pressure.
TCL Multimedia achieved sales revenue of 11.97 billion yuan in the first half of this year, down 1.63% year-on-year; net profit attributable to the parent company was 83 million yuan, down 23.9% year-on-year. This is in line with the industry situation in which the average price of the domestic color TV market fell and the “increment does not increase revenue†in the first half of this year.
The gross profit margin of TCL Multimedia in the first half of the year increased from 16.6% in the same period last year to 17.8%, indicating that the product structure improvement has progressed. By optimizing product structure and increasing market share, TCL Multimedia achieved a sales of 8.807 million TV sets in the first half of the year, up 11.5% year-on-year. Surface TV's market share in June was 30.8%, maintaining a leading position among domestic brands.
At the same time, TCL strengthens the operation of smart TVs. The number of active users of the TV+ intelligent network TV platform has reached 14.558 million, and the number of daily users is 6.245 million. The number of active users of the intelligent network TV platform operated by Huanwang has reached 23.689 million, and the number of active users has exceeded 8.03 million. It is the largest home synchronization cinema line operating platform in mainland China.
Affected by the sluggish overseas mobile phone market and the restructuring of TCL Communication's China business, TCL Communication (2618.HK)'s main business income in the first half of the year was 9.28 billion yuan, down 11.8% year-on-year; net profit attributable to the parent company was 0.19 billion yuan, down 94.7 year-on-year. %. TCL Communication has initiated the privatization of the Hong Kong main board market and hopes to establish a sustainable competitive advantage through the optimization of product structure, regional structure, channel structure and growth of the global mobile Internet user service business.
TCL's white electricity business began to exert its strength in the first half of the year. The home appliance industry group achieved sales revenue of 6.77 billion yuan, a year-on-year increase of 10.6%, and net profit of 0.69 billion yuan, an increase of 13.1%. Through years of R&D investment and coordination and interaction between industries, TCL's home appliance business has shown a trend of accumulation.
Or will launch the 11th generation LCD panel line
In the face of the economic slowdown at home and abroad, how to make the performance grow steadily? TCL Group is currently suspending trading and planning major asset restructuring matters. The industry speculation is likely to be related to the 11th generation LCD panel line in Shenzhen, and does not rule out the possibility of restructuring deep textile.
As early as the end of last year, TCL Group President Bo Lianming revealed in a forum that TCL and Huaxing Optoelectronics had plans to launch the 11th generation LCD panel line. This year, the trend of large-scale domestic color TV market is becoming more and more obvious, which will accelerate the decision of Huaxing Optoelectronics to launch the 11th generation line.
Wu Rongbing, panel analyst of IHS Display Search, told the First Financial Reporter that the average size of the global color TV has reached 42 inches this year, and the average size of the Chinese color TV market has increased to 45 inches. For every 1 inch increase in the average size of color TVs, it is necessary to add an 8.5-generation line with a monthly capacity of 110,000-120,000 substrates. Therefore, it is time for Huaxing Optoelectronics to launch the 11th generation line.
Wu Rongbing estimates that the main panel of Huaxing Optoelectronics' 11th generation line may be 45-inch, 49-inch, 65-inch or even 70-inch and larger products. It is expected to be put into production in the second half of 2018 and the first half of 2019. In 2019, the market share of LCD TVs of 55 inches and 65 inches will be further enhanced.
Why did TCL postpone the 11th generation line project after half a year? Wu Rongbing believes that the first is that the glass substrate matched with the 11th generation line is larger, it needs to be supplied nearby, and the supporting equipment requirements are also higher. Therefore, the glass factory and the equipment factory must be prepared. Second, the 11th generation line investment is relatively large. The fundraising will take time. Due to the location in Shenzhen, the Shenzhen government may support it.
Previously, TCL Group had wanted to reorganize Shenzhen Textile (the major shareholder is Shenzhen Investment Holdings Co., Ltd., the actual controller is the Shenzhen State-owned Assets Supervision and Administration Commission), and the spin-off of the Huaxing Optoelectronic Panel business was later suspended. Now, the global panel industry is picking up, Huaxing Optoelectronics is ready to launch the 11th generation LCD panel line, and the timing is coming again.
Coincidentally, TCL Group and Shenzhen Textile also announced the suspension of major events on August 5th. Will TCL Group and Shenzhen Textiles “renew their leading edge� Everything still needs to wait for the final announcement of the announcement.
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