On May 9, TCL (Group) held the 2021 results media communication conference, TCL founder and chairman Li Dongsheng said that the panel industry as a whole is close to the bottom, in the downward cycle of the industry, TCL will adjust the product mix, strengthen technology development, continue to promote globalization strategy and other measures to cope with.
In 2021, TCL (Group) achieved operating revenue of 252.3 billion yuan, up 65% year-on-year, and net profit of 17.1 billion yuan, up 129% year-on-year. Its major industries have improved quality and efficiency, and its overall scale has reached the top 500 in the world.
Li Dongsheng believes that there are four main factors supporting TCL's performance growth: first, reform and transformation to improve core capabilities. In the past few years, TCL has continued to promote reform and transformation, improve core capabilities, and effectively support the development of the company. Second, mergers and acquisitions to focus on the main business, open up a new track. TCL made some mergers and acquisitions centering on core industries, especially the acquisition of Tianjin Zhonghuan, which greatly enhanced TCL2021 performance. Third, we will improve the business structure. TCL develops from popular products to high-end products and from product assembly to core technologies. Optimizing business structure and product structure is an important driving force for its development. Fourth, continue to advance globalization. Last year, TCL's overseas revenues grew 65 per cent and its exports 70 per cent.
The panel industry has recently entered a downward cycle. In this connection, Li Dongsheng introduced that from September 2020 to August 2021, the industry is in a rising cycle, with a relatively strong rise, and the price of main products has doubled. From September 2021 to now, the decline is also obvious. "As for the turning point of the downward cycle, I cannot predict it, but judging from the logic of industrial management itself, it is close to the bottom."
"For TCL, it still needs to focus on improving its competitiveness." TCL's response to the panel downturn cycle includes adjusting its product mix, strengthening technology development and expanding overseas business, Li said. He said the global market for display products is growing at a steady rate of 5 to 8 percent a year. Mobile phones and TVS are growing at a relatively low rate, but new applications such as MNT, car and display are growing faster. TCL Huaxing's non-TV and non-mobile phone business will increase significantly in 2021 and will further increase this year. In addition, TCL Huaxing is also adding corresponding capacity construction in the new product structure. For example, the T9 project in Guangzhou is mainly medium sized commercial products, while the T5 project in Wuhan is mainly LTPS products.
As for TCL Central, Li Dongsheng said that the performance of TCL Central's new energy photovoltaic business is better than the industry average and better than its peers. After the acquisition of TCL Zhonghuan, through business restructuring, changing the system and mechanism, improving strategic planning ability and improving operation and management efficiency, TCL Zhonghuan's competitiveness has been significantly improved. This year, TCL Zhonghuan is confident to continue to maintain business growth.
Li dongsheng also said that in the face of the global economic situation this year, TCL will adhere to the bottom line thinking, "any major project decisions, business decisions should be in an invincible position before winning." In terms of business resource allocation, TCL will shrink appropriately, control the pace of development, stabilize operating cash flow and strictly control the asset-liability ratio. However, He also said that TCL will maintain its strategic focus with firm confidence and continue to push forward its business strategy, seeking opportunities and developing in adversity. Development is the absolute principle, and only development can solve the problems in development and be better able to cope with risks and challenges.
