Tcl's Multimedia Business Turns Losses Into Gains

TCL Group announced the results. The net profit from January to September of this year is expected to rise about 300% to 335%. This year the performance is growing rapidly, which is the result of the steady growth of the business. The most important is that the company's multimedia business turns losses into gains and the excellent sales.

The analyst said last year's multi-media business is at a loss. This year, there is a substantial increase in the sales of multimedia services. It is mainly due to the company's rectification in areas such as the optimization of product mix, expanding distribution channels, operating cost savings. The effect is obvious.

Last year, the product mix is not very reasonable. The sales structure proportion of LED-backlit TV and the LCD TV are very low as the product mix is irrational and the inventory pressure is high. This year TCL focuses on optimizing product mix, such as last year there are more than 400 products, this year it streamlined to more than 200 products. It also actively expanded its sales channels and paid close attention to the sales of the third or fourth tier cities. It carried out the associated marketing plan. This year the company's overall operating costs are also reduced.

The analyst pointed out that, the sales of TCL's LCD TV have already started to restore the growth momentum. The growth rate was significantly higher than the average of the industry. Based on the confidence in the growth of the TV business, TCL increased the sales target of the LCD TV in 2011 from 8.9 million units to 9.6 million units. And it is expected that in the next three quarters, TCL's TV business will continue to restore the growth.

The analyst said he is still optimistic about the growth of multimedia services. The LCD TV demand is still very large, including the overseas replacement demand in emerging markets and the commercial replacement uses in hotels, restaurants and other uses. Home appliances going to the countryside takes a smaller proportion of sales. The company is still actively developing the markets of the third and the fourth tier cities.

The analyst believes that, despite TCL has a substantial growth in sales revenue due to the combined effects, but the profit depends on the late release of the follow-up capacity. Another analyst said due to the reasons such as the real estate regulation, macro-economic downturn and so on, the future sales are difficult to say.