[PConline Information] Changhong, once a memory of several generations of Chinese people, from the end of the 80th, Changhong CRT TV was accompanied by an impressive TV series into people's lives; in 1997, Changhong TV reached a domestic market share. An amazing 35%; on May 21st of the same year, “Sichuan Changhong,†the “first bull stock†of the Shanghai and Shenzhen stock markets, climbed to the height of 66 yuan for the monks, becoming a leading domestic color TV industry; at the end of the 1990s Changhong TV has become the flagship of the domestic color TV industry. Together with Konka, TCL and other brands, it has promoted the popularity of CRT TVs and drove foreign-imported CRT TVs out of the domestic market.
Changhong booth at CES2011
However, the reality is cruel. Changhong experienced several strategic failures and its operating conditions have gradually declined. According to statistics from Yikang in the fourth quarter of 2010, Changhong’s LCD TV retail share ranks only ninth among all brands in domestic brands. Also ranked fifth in Hisense, Skyworth, TCL, and Konka. The direct response to the stock price data is, March 14, 2011, "Sichuan Changhong" the closing price of 4.00 yuan, only 6% of the stock price in 1997, Changhong Electric decline has become cruel facts.
CPT Acquisition and Apex Event
In August 1998, the original legal representative of Changhong Company, Ni Runfeng, took the sensational action of the color TV industry and the color management industry, that is, the acquisition of a monopoly of domestic color tubes (over 80% for large 25-inch screens and more than 60% for 21 inches). In order to achieve the purpose of breaking off the color TV counterparts of the major arteries (because the color tube is the main component of color TV), so as to achieve the relative stability of the color TV prices and maintain the market monopoly of Changhong TV.
Sichuan Changhong Production Building
Changhong originally expected that the color TV sales in 1998 will usher in a hot sales market, but in fact the sales of Changhong TV are very light, and even before and after the National Day in 1998, the market was even worse than in previous years, until the end of January 1999, Changhong also Did not usher in the climax of color TV sales, but at the same time it has formed up to 500 million units of TV inventory of the whole machine, if according to the market price of around 2,000 yuan/station at that time, the direct backlog of funds reached 10 billion yuan. According to estimates by Sichuan Changhong Finance Department, the direct economic loss caused by the failure of the “CPT acquisition†decision was as high as RMB 2.2 billion.
After 1998, in order to alleviate the dilemma of falling profitability and rising inventories, Sichuan Changhong implemented internationalization under the leadership of Ni Runfeng. Soon, Sichuan Changhong signed an agreement with Apex Corporation of the US to insert Changhong's products into the US market. In the same year, Changhong’s domestic sales and export volume both ranked first in China’s color TV industry.
However, at this time, Changhong was not easy. The color TVs shipped out of a car failed to exchange a large amount of dollars. Changhong, on the one hand, put forward the requirements for reconciliation. On the one hand, it continued to ship. Apex always deliberately banned or paid a small amount, and the arrears continued to increase. After a wave of waves broke, on May 14, 2004, the US International Trade Commission finalized the verdict on the Chinese color TV set up in the anti-dumping investigation against China Color TV. According to the ruling, the United States will impose a 24.40% anti-dumping tax on Changhong, which is the highest among domestic enterprises.
Color picture tube is one of the most important components of CRT TV
On August 12, 2004, Zhao Yong was elected chairman of Sichuan Changhong and began to handle Changhong’s huge account receivables to Apex. Due to the unsuccessful recovery of Apex, at the end of December, Changhong announced that it planned to make a bad debt accrual for Apex’s 46.7 million US dollars in Changhong’s payment, which is expected to be US$310 million. According to the exchange rate at that time, Apex’s total amount of bad debts has exceeded RMB 3 billion.
From the period of 1999 to 2004, Changhong has lost more than RMB 5 billion in “CPT acquisitions†and “Apex bad debtsâ€. This is just the beginning of the decline of Changhong. >>
Note: The views listed in this article only represent the author's personal position and do not represent the views of PConline.
The confusing 5 billion fraud case
On February 25, 2010, some media reported that the former director of the Hunan Administrative Committee of Sichuan Changhong Sales and Service Department (named in the 1990s, equivalent to the person in charge of sales in Hunan Province) Van Dejun reported to the Sichuan State Tax Bureau and other departments, Sichuan Changhong obtained The qualifications for allotment of stocks were inflated through sales of false goods from agents and false financial accounting. In addition, there was an act of repeatedly recording high season sales revenue, and accumulated inflated sales revenue was about 5 billion yuan. This was the Sichuan Changhong “Fake Case†that later made a lot of noises.
Since 1992, Sichuan Changhong, which requires its dealers not to settle accounts with commercial acceptance bills, has had huge commercial acceptance bills in the financial statements. Although there is no conclusive evidence, the economist Lang Xianping and civil finance expert Shen Caoyun questioned it in 2005. They believe that the filth they contain is unsustainable for investigation, but Changhong has consistently denied this. In Fan Dejun’s report to the relevant department’s desk materials, the report on this issue was once again impressive. According to the material, the financial statements of Sichuan Changhong in 1998 showed that there were 71 commercial acceptance bills receivable in this year, totaling 2.25 billion yuan, which were the result of Sichuan Changhong's fraud.
In 2010, Sichuan Changhong deep financial falsification door
In addition to inflating sales revenue through huge amounts of fake commercial acceptance bills, the report also mentioned that in 1998, Sichuan Changhong had repeatedly recorded sales in the peak season, which amounted to approximately RMB 2 billion. According to the report materials, Sichuan Changhong's fiscal year 1997 was from January 1, 1997 to December 31, 1997, but Sichuan Changhong's 1997 sales revenue account closing date was actually January 31, 1998, and will be 1998. From January 1 to January 31, sales revenue of nearly 2 billion yuan during the Spring Festival sales season was calculated in 1997, and the billing date of this VAT invoice for 2 billion color TV sales was December 31, 1997. However, this part of sales revenue was again included in the annual report in 1998 in a flexible manner.
On the first working day after the Spring Festival in 2010, the Sichuan Securities Regulatory Bureau formally accepted Fan Dejun’s report and entered the informal investigation stage. The supervisory level judged whether to enter the formal investigation stage based on the conclusion of the informal investigation. On May 21, the Sichuan Securities Regulatory Bureau and the State Taxation Bureau of Mianyang City issued a preliminary investigation report in a reply letter, saying that Changhong’s tax-related violations were not found.
The day before the Securities Regulatory Agency wrote back, on the evening of May 20, Fan Dejun, who reported Changhong’s financial fraud, was handcuffed by several plainclothes people in a supermarket in Wujiang City under the jurisdiction of Suzhou City, Jiangsu Province. They called assistance. Sichuan Mianyang police handled the case. According to Fan Dejun’s wife Zhang Litao’s description, in a written document presented to her by the police that evening, the reason for Van Defen’s criminal detention was that he was “allegedly falsely issuing VAT invoices†during Changhong’s work many years ago—and this happened to be a report. Changhong's "first sin."
In 2010, Sichuan Changhong deep financial falsification door
On March 2nd, 2011, Vanderbilt was originally a court hearing day after 10 months of inter-provincial detention. However, the trial failed to meet the deadline and the trial time was to be determined. The reason given by the People’s Court of Mianyang High-tech Zone was that: Fan Dejun’s defender proposed that he had not checked and requested that the date of the hearing be postponed. However, Fan Dejun’s defense lawyer claimed that “because the procuratorial organ filed a public prosecution with the court, it did not promptly submit a copy of the main evidence in accordance with the law, resulting in the defender not being able to read the dossier material in due time.â€
Regardless of whether or not Sichuan Changhong had a RMB 5 billion fraud case, it has aroused widespread concern in the society. The author does not intend to comment on who is right and wrong. The author only looks at this matter from the perspective of a bystander, regardless of the final outcome. This will have an incalculable effect on the image of Changhong and the management of Changhong. >>
Note: The views listed in this article only represent the author's personal position and do not represent PConline's opinion.
The failed billion-dollar plasma strategy
In March 2009, Changhong Hong Europe plasma panel production line, which invested 2 billion U.S. dollars, has been in mass production for two years. On January 21, 2010, Changhong announced that the monthly product yield of Hong Kong plasma panel production line has exceeded 80%. Enter the full-scale production stage. It is understood that the Sichuan Sichuan Hongou PDP Project officially mass production of the first phase of the first phase of the annual production capacity of 1.08 million (by 42 inches), in 2010 will reach 2.16 million. The second phase will be completed by the end of 2012. Through the multi-phase construction, the final production capacity will reach 6 million pieces, and it will enter the top three in the world. By then, it will surpass LG after Panasonic and Samsung.
The commissioning of the Hong-Europe plasma panel production line seems to indicate that the short-sales panel of domestic brands has been made up. Some industry insiders even optimistically predict that the volume production of Hong-Europe plasma panels will drastically reduce the selling price of flat-panel TVs in China by 20% - 30%. However, behind this figure, is it really a good prospect like the press release?
China Yikang's share of LCD retail sales in 2009-2010 (%)
Let's take a look at Changhong Hong Europe plasma production technology, currently achieving a good product rate of over 80%, mastering the 8-sided take technology (a motherboard cut 8 plasma panels), compared with Samsung and LG up to 99% yield, Panasonic There are no advantages to using the 16-face technology. In addition, the real advantage of plasma TVs is that the cost of the big screen is much lower than that of LCD TVs. However, the disadvantages are also very obvious. It is that the cost of small and medium-sized devices is too high, and even 32-inch products cannot be introduced.
Then take a look at sales data, DisplaySearch latest statistics show that in 2010 the global TV shipments reached 247 million units, of which 188 million LCD TVs, plasma TV 18 million units, plasma TV shipments only accounted for LCD TVs 9.5% of shipments. According to the statistics from Ovid Consulting, in the first half of 2010, the domestic retail volume of plasma TVs was only 890,000 units. In the same period, the sales of LCD TVs have exceeded 13 million units, and the shipments of plasma TVs only accounted for the shipment of LCD TVs. The amount of 6.8%.
China Yikang's share of PDP retail sales in 2009-2010 (%)
Looking again at the production of plasma panels, the world’s top 4 plasma panel makers are Panasonic, Samsung, LG, and Changhong, of which Matsushita’s annual production capacity is 13 million and Samsung LG has more than 5 million, not to mention Changhong’s output, which has already been achieved. With 23 million units, compared to the 18 million units of global plasma TVs shipped in 2010, there was excess capacity.
In the plasma TV market shrinking, global plasma TV panel shipments are in oversupply, Changhong Hong Europe plasma panel production line once faced with mass production, it faces enormous sales pressure. As far as domestic manufacturers are concerned, only Changhong and Hisense are still producing plasma TVs, and Hisense's sales account for only 2.2% of the market. It is also difficult to see Hisense plasma TVs in terminal stores. The author once asked the heads of other domestic manufacturers that they did not plan to re-produce plasma TVs. This means that Changhong must digest the 2.16 million plasma panels (volume production data for 2010) produced by the Rainbow Euro panel production line. If Hong Europe insists on increasing the number of mass production to 6 million (phase 2 project planning), the sales pressure of Changhong plasma TV will be even greater.
Finally, take a look at Changhong's sales strategy. Although Changhong has launched many plasma TV ads, such as "to give children plasma", "plasma more eye protection" and so on, but from the actual sales of first-line stores, it still holds the bulk of sales. In terms of LCD TVs, LCD TVs and plasma TVs also occupy the most eye-catching and largest display positions.
The author has encountered consumers asking the question more than once: Why have I never heard of plasma TVs? Why buy LCD TVs that sell far less than liquid crystals? The author does not mean that plasma TVs are inferior to LCD TVs. On the contrary, plasma TVs have the advantage of good color, but it is also true. But after investing 2 billion U.S. dollars, after nearly 4 years of construction and 2 years of volume production, there is still no profitable prospect. At present, it seems to be a "chicken rib", which has to be said to be the biggest mistake of Changhong's product strategy. >>
Note: The views listed in this article only represent the author's personal position and do not represent PConline's opinion.
Lack of industrial support and product innovation
Changhong CRT TV can be swept all over the country, once occupying 35% of the TV market share. One advantage has to be mentioned: that is the CRT TV supporting industry where Changhong Sichuan Mianyang is located. In Mianyang, apart from Changhong's color TV production plant, there are a series of supporting industries including upstream and downstream, and these companies are actually serving Changhong TVs, so Sichuan Changhong has a unique location advantage.
CES2011 Changhong Exhibition TV Wall
However, with the shrinking market share of CRT TVs, Changhong TVs are also facing a transition from CRT TVs to rear-projection TVs and flat-panel TVs. The rear-projection TV has been directly driven by the flat-panel TVs before it completely replaced the CRT TV. Changhong also faces the conflicting choices of whether it wants to transform LCD TVs or plasma TVs. However, regardless of which direction it chooses, it means that the former CRT supporting companies Will be completely laid off.
Compared to Skyworth, TCL, Konka in Guangdong, and Hisense in Shandong, Changhong once lost its geographical advantage, because in the current situation of domestic TVs lacking core screen, shipping imports became a helpless choice. This is an important reason why Changhong is eager to launch its own panel production line. However, LCD panel makers at that time were reluctant to establish a domestic LCD panel production line through technology transfer or cooperation. Therefore, the plasma panel also became an inevitable choice for Changhong.
Looking at the LCD TVs and plasma TVs introduced by Changhong since the last two or three years, neither the appearance of the TV nor the product features and technology of the TV have left a deep impression on the author. Before the launch of the iTV series, the appearance of Changhong LCD TVs at first glance looked like they were carved out of a model, not only without personality, but also not in line with young people's aesthetic point of view.
CES2011 Changhong Showroom Environmental Friendly TV
Changhong LCD TVs have been promoting music education and network functions in recent years. However, depending on the network, these functions are still limited by external factors such as copyright and internet speed. Although 3D TVs have also been introduced, they are actually effective. It does not produce color, and it has no advantage in domestic counterparts' products. Changhong has been promoting plasma TVs, but only large-screen models have been launched in full HD resolution products, compared with the gap between the other joint venture plasma TV brands even more obvious.
Summary: From the peak of profits and stock prices in 1998 to the current dilemma of plasma, share price and market share fell sharply. In the short span of more than a decade, Changhong experienced too many “gates†and each “gate†"The amount of money involved in the incident is not small. For Sichuan Changhong, which currently has only 2.85 billion in share capital, it can be described as a straitjacket." In the near future, Changhong can find its own "road." [Back to Channel Home]
Note: The views listed in this article only represent the author's personal position and do not represent the views of PConline.
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