Sun Yanbiao
After more than two years of rapid growth, the domestic flat-panel TV market in China is entering a mature phase, with sales in cities already beginning to decline.
Yesterday, domestic TV giant Skyworth Digital (00751.HK) released its 2010 financial report showing that as of March 31, 2011, the company's revenue for the previous year was HKD 24.339 billion, an increase of 6.9% year-on-year. It achieved a net profit of HKD 1.281 billion, a decrease of 3.4% year-on-year. Zhang Xuebin, Chairman of the Board of Skyworth Digital, helplessly stated that overall color TV sales decreased by 11.2% year-on-year, but due to a sharp increase in digital set-top box sales, the company's overall revenue steadily rose.
"Domestic flat-panel TV market will see fierce price wars in the second half of this year," Peng Xiandong, an analyst at Zhongyi Kang, told *The First Financial Daily* yesterday. In the first five months of this year, domestic city flat-panel TV market sales have seen a negative growth of 1%, thanks to the growth in rural markets, allowing the domestic flat-panel TV market to maintain a positive growth of 2.7% in the first five months.
In fact, the annual report of Skyworth Digital spanning the first quarter of 2011 has clearly outlined the trend of the domestic flat-panel TV market for this year.
Skyworth Digital's annual report shows that in this fiscal year, TV product sales revenue was HKD 20.163 billion, a decrease of 1.8% year-on-year; of which, domestic market sales revenue was HKD 19.103 billion, a decrease of 0.7% year-on-year, with domestic flat-panel TV sales reaching 6.26 million units. However, in the first half of 2010, the figures showed that domestic flat-panel TV sales increased by 9.3% year-on-year, and sales revenue increased by 3.4% year-on-year. The rise and fall of these figures indicate that from the fourth quarter of last year, Skyworth TV sales in the domestic market have shown a clear negative growth.
"Due to macroeconomic reasons, along with the weakening of policy benefits such as appliances going to rural areas and trade-in programs, the domestic flat-panel TV market has already shown signs of weakness," Peng Xiandong pointed out. Monitoring data from Zhongyi Kang across 470 cities nationwide showed that in February and May this year, flat-panel TV sales in these cities decreased by 36% and 13% year-on-year respectively. Thanks to the "May Day promotion," the first five months of domestic city flat-panel TV market sales only saw a 1% negative growth.
Peng Xiandong revealed that at the beginning of the year, domestic TV manufacturers still estimated that this year's domestic flat-panel TV market sales would grow by 15%, but now it has basically dropped to around 10%.
From this perspective, domestic TV manufacturers will face enormous operating pressure this year.
"Once the domestic flat-panel TV market enters the mature phase, competition strategies among major TV manufacturers tend to be similar," said a relevant person from TCL Multimedia's overseas division. On one hand, TV manufacturers are accelerating alliances with LED backlight manufacturers in hopes of lowering product costs from the upstream of the industry chain; on the other hand, they are expanding overseas market sales, particularly in Southeast Asia, South Asia, and Latin America where they already have advantages.
> Related Reports: TCL sold 558,200 LCD TVs in May, up 40% year-on-year; plasma TV sales surged 70% in April, some brands returned to the fold; this year's 3D TV sales may soar, expected to grow by 463% year-on-year.
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