Can Changhong revive? 3 Questions to face

Yesterday, Sichuan Changhong published the 2014.5 Annual report, about the financial results, the number of noteworthy attention is 2:

1, revenue. Listed companies in the first half of the revenue 27.265 billion yuan, the year-on-year decrease of 2.72%.

2, profit. Total profit of 181 million yuan, reduced by 62.15% per cent, attributable to the shareholders of the listed companies net profit-181 million yuan. In the same period of 2013, the net profit attributable to shareholders of listed companies was 227 million yuan.

The traditional home appliance slump, already known, but similar to changhong such bleak but also rare. For the loss of Changhong reasons, Changhong gave the argument, there are 2.

1, the withdrawal of energy-saving subsidy policy.

This is easy to understand, has become the major traditional home appliances manufacturer's shield. TCL, Skyworth These companies have no exception to take this to say. Of course, this is one of the facts.

2, the key products in the investment period

Changhong gave another explanation, is the research and development, brand and sales of the focus of investment, and the investment at present did not bring high returns. This is also easy to understand, Changhong has been doing a set of customer series, is currently the product level stage.

In response to the above 2 problems, Changhong gave its own solution, that is, the introduction of state-owned enterprise reform program, Changhong Group will be restructured into Sichuan Changhong Electronics group Holding company. The aim of this approach is to introduce strategic investors and more marketable personnel management systems.

Can these practices help Changhong stand up again in the field of home appliances? Analysis that Changhong has 3 difficulties:

1, the subsidy policy withdrew, Changhong did not find an effective stimulus policy

State policy subsidy in the home appliance market overdraft, become all home appliance manufacturers, including Changhong a problem, that is: how to continue to stimulate the consumer's enthusiasm for buying. The measures given by Changhong are big promotion. However, this practice has little effect, based on the strength of the changhong is relatively weak, the most important is that the music to see these players into the Bureau, the TV into a loss of selling hardware in the public opinion environment.

2,chiq can you complete the reconstruction of Changhong? Not good.

A special need to pay attention to the link is that the capital market in fact bullish Changhong's brand shape. Every press conference of CHIQ will cause the positive reaction of capital market.

But as a listed company, in addition to the future, whether to bring shareholder returns is also a very important trade-off factor. The price of Chiq products is relatively high, in this round of hardware + content of the new business model of the trend, the cost of hardware to become a lot of people to pursue a preferred factor. Changhong's high-end brand strategy, whether it will work, it takes time to prove.

At least for the current earnings, the product's contribution to revenue and profits is small.

3, will the reform of Changhong's hopes work? It's a question.

As mentioned above, Changhong proposed the reform of state-owned enterprises, Changhong Group will be restructured into Sichuan Changhong Electronics group Holding company. In addition, there are a number of other adjustments.

The question now is: Can Changhong's reforms help Changhong regain its position in China's home appliance market? This is a need for careful consideration. People familiar with Changhong know that Changhong has made many reforms in its history. But the company did not because of reform to return to their peak times, but with Tcl, Hisense these former younger brother more and more distant.

Summary：

Changhong used to be the leader of the domestic color TV, this identity was the reverse attack occurred in 2001 years. Changhong's advantage lies in a solid manufacturing base, decades of research and development of household electrical appliances, as well as a relatively rich channel and after-sales service system. In the traditional household electrical appliances industry generally decline today, Changhong has no exception to enter the Descent channel. Whether the company can get out of the doldrums needs to address the three issues mentioned above.