Konka's 2021Q1 financial report reveals the secret of growth: strengthening technology investment and accelerating product upgrades

The "black swan" event that broke out in early 2020 has profoundly affected people's lives and the development of all walks of life. For example, in the field of home appliances, the epidemic has drawn an uncoordinated curve on the development trajectory of the industry.

In the first half of the year, the aftermath of the epidemic continued and the curve meandered downward; but in the second half of the year, as the epidemic situation was brought under control, consumption policies were implemented, and home appliance companies responded actively, the curve rose again, forming an exciting V shape.

However, overall, the home appliance industry, which has long entered a period of stock market and industrial adjustment, has continued its past slow downward trend. According to data from the National Bureau of Statistics, the main business income of China's home appliance industry in 2020 was 1.48 trillion yuan, a year-on-year decrease of 1.06%, and the profit was 115.7 billion yuan, a year-on-year decrease of 5.61%.

However, there are also companies that have found their own pace of progress in the decline of the industry. Konka Group, which has been deeply engaged in scientific research and actively developing its industrial chain layout, delivered an excellent answer sheet in 2020 with a year-on-year increase of 125.26% in net profit attributable to shareholders and a year-on-year increase of 17.12% in total assets, despite the overall downturn in the industry.

On April 28, Konka Group released its first quarter 2021 financial report, which showed that this momentum has been inherited and carried forward in the new year. During the reporting period, Konka Group's revenue increased by 25.82% year-on-year, and the net profit attributable to shareholders of listed companies increased by 133% year-on-year.

Bucking the trend Double increase The data reflects Konka Group's successful breakthrough in the home appliance market, and its multi-business and platform-based strategy has begun to blossom in many places.

The data that the overall amount of the home appliance industry fell more than the volume showed that more home appliance companies still regarded price cuts as the main driving force to boost consumption. However, as Jiang Feng, chairman of the China Household Electrical Appliances Association, said, "The '14th Five-Year Plan' period is a critical period for my country's home appliance industry to optimize its industrial structure and transform its growth momentum."

Strengthening investment in science and technology, Konka promotes the high-end development of the industry

"Price war" as a means to promote sales in the short term has long been a consensus among industry practitioners, and can only poison the industry from within. It will eventually lead to a reduction in product configuration in the industry, bad money driving out good money, and when the tide recedes, the naked swimmers will be clearly seen. Price reduction is unlikely to become a long-term driving force for industrial progress.

During the 13th Five-Year Plan period, the home appliance industry achieved success by relying on technological progress and completed the stage goal - "making China's home appliance industry globally competitive"; how to achieve the goal of the 14th Five-Year Plan period - "making China's home appliance industry globally leading"? The answer still needs to be found in core technology research, solving user pain points, promoting industrial chain collaboration, and building a smart home appliance ecosystem.

As the Central Economic Work Conference emphasized, "enterprises should play a leading role in scientific and technological innovation." Konka Group has always implemented the long-term development strategy of "technology + industry + park" and continuously increased its R&D investment and scientific and technological innovation.

During the epidemic, the "stay-at-home economy" has driven users' demand for televisions to become more diversified, extending from past display devices to application scenarios such as social, education, office, and games. Intelligence and high quality have become new keywords, and even pushed the color TV industry to see a decline in volume and an increase in value. In the first quarter of 2021, domestic color TV sales reached 9.9 million units, down 0.6% year-on-year, with sales of 31.1 billion yuan, a year-on-year increase of 30.9%.

As a field that Konka has been deeply involved in for many years, the accumulation and research and development of display technology has been laid out for many years. At present, China has international competitiveness in the field of LCD and OLED display, but the future-oriented Mini LED and Micro LED technology can not only form a development pattern of complementary advantages with the current LCD and OLED, but also play an irreplaceable technical advantage in display brightness, response speed, contrast, life, etc., and promote the high-end process of the industry, which is indeed a path to leading the industry.

In 2020, the first phase of Chongqing Konka Optoelectronic Semiconductor Industrial Park with a total investment of 30 billion yuan was officially put into production. Konka released the APHEAE Micro LED future screen product matrix here, including the world's first Micro LED screen watch APHEAE Watch, which caused a stir in the industry.

At two major conferences in my country in 2020, the world-leading "5G+8K" ultra-high-definition live broadcast system, led by Xinhua News Agency and built by a number of top companies in the industry, was officially unveiled. The signal from the Beijing studio was transmitted to the four poles, and the visual presentation of the live broadcast was undertaken by Konka Group's "APHEAE Future Screen", demonstrating the powerful Chinese network and display technology on a stage that has attracted international attention.

With users' growing demands for product quality and technology, and their decreasing sensitivity to price, the display industry has truly entered a period of transformation in growth momentum. Konka, which has promoted the improvement of the industrial chain through science and technology, industry, and parks, is leading the Chinese display industry to stand out in the world by relying on its research and development of core display technologies.

Against the trend for 4 years, Konka achieves breakthrough in white goods industry

Compared with the black appliance sector, which is progressing rapidly in terms of intelligence and technological iteration, China's white appliance market, represented by refrigerators, washing machines and air conditioners, has been relatively calm, and the industry ranking has remained largely unchanged for many years.

However, the slow technological progress has violated users' expectations for new products, resulting in stagnation in China's home appliance retail sales, which were 810.4 billion yuan in 2018 and 803.2 billion yuan in 2019. In 2020, the average prices of refrigerators, washing machines and air conditioners in the Chinese home appliance market also fell to varying degrees.

Konka has long recognized the important position of white appliances in the Internet of Things and smart homes. In order to provide users with integrated smart scene solutions, Konka has long launched a full industrial chain layout.

In 2018, Konka Group invested 455 million yuan to acquire Xinfei Electric, a long-established white goods company, and launched the "Konka + Xinfei" dual-brand synergy strategy; in 2019, Konka Group invested in the reorganization of the washing machine R&D team and established Kanghanrui Air Conditioning Company; in 2020, Konka Group acquired Beko Electric's Changzhou factory, and the strategic layout of the entire industry and the entire chain was completed.

Over the past four years, Konka Group has always adhered to the policy of focusing on consumer needs. In the research and development, design and production of new products, it has followed the Internet trends and consumer needs and created value for users from the perspective of a smart life creator.

With its technological innovation, Konka Group's white goods industry has also been recognized by the industry. On April 12, Konka Refrigerator won the third prize of Anhui Science and Technology Progress Award for its innovative breakthrough in food preservation technology in the project "Research and Industrialization of Key Technologies for New Fresh-keeping Refrigerator Based on Multi-field Coupling". The project deeply studied and explained the influence mechanism of different physical field combinations on food preservation, and proposed a multi-field coupling refrigerator preservation solution, which can preferentially extend the video fresh-keeping period by up to 15 days. It not only responds to the current consumers' growing health needs, but also plays a demonstration and driving role in food safety.

Of course, gold and silver trophies are not as good as word of mouth from consumers. It is precisely by relying on the insight into the pain points of consumers in their daily lives and the large investment in technology research and development and product design that Konka Group has been able to achieve a rapid leap in market position in four years and create a myth of rising against the trend.

As a veteran in the TV industry, Konka Group has not limited its vision to the small screen, but has always paid attention to the iteration and transformation of the industry. It not only has sufficient technical reserves in display technology, but also promptly paid attention to the huge value of home intelligence in the era of the Internet of Things, and promptly launched a layout in the field of white goods. What is even more commendable is that, adhering to the spirit of continuous improvement, Konka has been able to push its white goods products to an extremely high level, forming a product matrix that can resist the industry's trough.

2021 has just begun, and we might as well look forward to Konka Group bringing more breakthroughs to the industry in the fields of smart home and display in the future.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.