sorts out its historical data and can be divided into the following stages:
from 2000 to 2006 (international mergers and acquisitions, heavy setbacks);
from 2007 to 2011 (industrial chain integration);
from 2012 to 2016 (the synergy effect is not satisfactory);
2017 to present (planning for reorganization);
Several issues must be thoroughly understood:
’s performance declined sharply when it was listed in 2004, revenue dropped in 2005 and 2006, and continuous losses occurred at the same time. What exactly is this?
After 2010, non-operating income increased significantly and became the main source of net profit. What are the business attributes behind this?
Before 2012, the cash flow from operating activities fluctuated greatly, but after that, the cash flow from operating activities was greater than the net profit. What is the reason?
From the perspective of asset structure, fixed assets and projects under construction increased significantly in 2012. What are these new production capacities used for?
With the above questions in mind, let’s review
one by one. In January 2004, TCL Group achieved the listing of the entire group by absorbing and merging its subsidiary TCL Communications.
At this time, its main products are personal consumer electronics such as color TVs, mobile phones and home computers, of which color TVs account for 41%.
note that its main business is color TVs, a business with extremely fast technological iterations.
Its technology iteration path is consistent with the technological development path of the display panel industry, namely: CRT (picture tube) - LCD (liquid crystal display) - OLED (organic light-emitting diode)
In the year when it was launched, TCL quickly acquired the French Thomson global color TV business (314.9 million euros, 67% share) and Alcatel mobile phone business.
Thomson, the originator of traditional picture tube (CRT) TV, produced the world's first color TV.
Moreover, Thomson was one of the Fortune 500 companies in the world at that time and was much larger than TCL. This typical Shetunxiang-style acquisition made TCL one of the top three in the global color TV industry.
However, who knew, the subsequent performance was shocking-its ROE dropped from 23.07% to -46.71%. The decline of
ROE was mainly affected by the net interest rate. In 2005 and 2006, it was criticized for continuous losses and was renamed *ST TCL
. The decline in net profit margin mainly came from two aspects: 1) the decline in gross profit margin; 2) the increase in asset impairment losses.
The reason behind this is the price war in the color TV industry and the iteration of superimposed technology.
During this period, the domestic color TV industry had overcapacity and frequent price wars. Sichuan Changhong launched four price wars in 1996, 1999, 2000, and 2003 respectively.
Among them, in 2003, Sichuan Changhong launched the rear-projection popularization plan, and the rear-projection TV dropped by up to 40% (the United States also began to implement the anti-dumping policy against my country's color TVs). Therefore, TCL had to follow the price reduction, and its gross profit margin that year was Down 3.6 percentage points
The price war has just subsided, and bigger impacts are coming one after another.
In 2005, the color TV industry rapidly transformed from the picture tube era to the flat panel era (including LCD TVs, plasma TVs, etc.), and Europe is the fastest growing region for flat panel TVs in the world.
However, Thomson, acquired through cross-border mergers, was still in the integration stage. Its original picture tube technology was almost worthless overnight, with a loss of 819 million yuan that year.
As a result, the sweet and savory acquisitions became a huge burden.
In 2006, the domestic CRT market also began to shrink. According to data from the Ministry of Information Industry, the overall sales volume of the domestic color TV market fell by 7%.
Performance has not improved at all. Therefore, TCL has made impairment provisions of 973 million yuan for inventory, fixed assets and other assets, and its losses have intensified.
This is a dangerous moment - a double blow from price wars, technology iterations, failed cross-border mergers and acquisitions, leading to a decline in revenue and profits, and a deteriorating fundamentals.
Its stock price fell directly from the highest point of 3.14 yuan/share to the lowest point of 0.58 yuan/share, a drop of 81.53%. It once became a penny stock, PB dropped from 5.2X to 1.2X
Bet on CRT TV, International The road to globalization has suffered heavy losses and has been losing money for two consecutive years. So, how can TCL make a comeback?
Foretell the follow-up, and listen to the next chapter's analysis
does not constitute any investment advice. The stock market is risky, so you need to be cautious when entering the market
Previous article review:
Display panel industry analysis episode 1 This giant, doesn't it make TVs?
Display Panel Industry Analysis Episode 2 How about the upstream and downstream?
