TCL eyes LCD TVs to boost its bottom line
Updated: 2011-04-30 09:14
By Emma An(HK Edition)
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Faced with declining sales figures, TCL Multimedia Technology Holdings Ltd - one of the largest manufacturers of televisions in China - said Friday it has raised the proportion of LED backlight LCD TVs in its product mix to 40 percent. It says it will continue to make an effort to increase this ratio in order to take full advantage of current market trends.
The announcement came as the company also announced that its revenue dropped 2.7 percent year-on-year to HK$6.58 billion for the first quarter of 2011 mainly due to a significant decline in overseas sales. Its net profit, meanwhile, tumbled 22.7 percent to HK$34 million from the first quarter of 2010.
The company sold a total of 1.93 million LCD TVs in the first three months of this year, flat from the same period a year ago. But TCL's high-end LED backlight LCD TVs saw a bump in sales and rose to account for 40 percent of sales volume in March from just 27.6 percent in December.
On the mainland, the company's most important market, LED backlight LCD TVs generated 43.4 percent of sales volume recorded for the LCD TV segment as a whole in March, up markedly from 26.5 percent in December. The enhanced product mix has helped, as the first-quarter gross profit of the China business jumped 26.7 percent from a year ago.
Zhao Zhongyao, CEO of TCL Multimedia, said in a conference call to the media on Friday that increasing the proportion of LED backlight LCD TVs in the product mix will remain the company's focus going forward as the company seeks to further benefit from fast-growing demand for high-end TV products particularly in China. "LED backlight LCD TVs and 3D-TVs have become the market trends," Zhao said.
Thus, TCL Multimedia has recently brought to market its new 3D LCD TV series as well as what it says is the world's first smart Internet TV product that employs advanced 3D User Interface technology. Meanwhile, the company also fleshed out its LED backlight LCD TV line by rolling out new products.
Changing the product mix may help, said Mark To, head of research at Wing Fung Financial Group. However, "the prices of LED TVs will likely continue to go downhill", said To, citing intensifying competition among domestic TV makers. This is despite the likely decline in the amount of televisions made this year after the earthquake in Japan. One of the consequences of the March 11 quake and tsunami is that the supply of raw materials has tightened, according to To.
But the good news is that the Chinese are still hungry for LCD TVs, To noted. CEO Zhao shared this view, adding that he was "confident in the growth of China business".
The company sold 1.33 million sets of LCD TVs in China during the first quarter, a rise of 12 percent year-on-year. Zhao expects its China business to be further bolstered as the company continues to expand its footprint in third-tier and fourth-tier cities as well as in little tapped rural areas.
LCD TV sales volume in TCL Multimedia's overseas markets plunged 19.2 percent from the first quarter of 2010. Overall, the company recorded a gross profit margin of 16 percent in the first quarter, up from 14 percent for the full-year 2010.
China Daily
(HK Edition 04/30/2011 page3)