The Skyworth Group, established in 1988, has been in operation for 36 years. Home appliance companies of the same era have experienced some ups and downs, and once well-known names such as Panda TV and Chunlan Air Conditioning have survived. Companies such as Midea and TCL, which have survived to this day, have grown into “giants”. Nowadays, Skyworth groups have ventured into red home appliances (refrigerators, washing machines, etc.), photovoltaic properties, and new power vehicles from color televisions. However, in terms of market share and stock market value, they are no longer in the forefront of their previous positions.
“Skyworth has fought a world-class war: China’s home appliance war. We are very clear in our hearts that the difficulties ahead are very terrifying.” On April 8th, Huang Hongsheng, the 68 year old founder of Skyworth, who was once known as the “King of Color TVs,” evaluated the transformation of home appliance companies in the new era when he declined interviews with media such as Interface News.
This annual gathering center, which has spread to dealers and employees all over the world, is the “next stop, 100 billion”, meaning that Skyworth Group is going to attack 100 billion yuan business development, Huang Hongsheng said, with the aim of achieving it by 2025.
In 2023, Skyworth Group realized a total expenditure of 690.31 billion yuan, an increase of 29.1% year-on-year; The net profit from returning to the parent company was 9.645 billion yuan, an increase of 17.5% year-on-year. However, the evaluation of this achievement by the company’s executives is “unsatisfactory”, as the strong sales of color TVs only rank third in the world and fifth globally, and the increase in white TV sales is considerable but not high in market share. These businesses have room for retreat.
Huang Hongsheng said that Skyworth Group owns more than ten property subsidiaries. In addition to the well-known set-top box and home appliance businesses, it also established and increased its fast growing photovoltaic business in 2020, static energy storage and energy storage charging stations, its own new power vehicle, as well as real estate property management and home appliance after-sales services. “Previously, various property companies were hesitant to make adjustments and feared the loss of power. However, when the enterprise reached a certain range, it needed to engage in ‘sea, land, and air joint’ operations,” Huang Hongsheng said.
For example, by adjusting the channels of each subsidiary, consumers can experience Skyworth’s different products and services through a single dealership. This adjustment has been implemented in overseas shopping malls. Skyworth’s overseas shopping mall expenses accounted for only 22% in 2023, with a relatively low level of internationalization, while its cooperating rival Midea’s overseas expenses in 2023 were already higher than those in China. Skyworth hopes to achieve a 5:5 ratio of domestic and international expenses in the future.
In order to achieve a revenue of billions, Huang Hongsheng also plans to renovate his department’s business branches and list them on the stock market, such as Red Home Appliances, Photovoltaics, and Skyworth Auto.
In fact, he has been conceptualizing this plan for a long time and also mentioned it to Interface News in a 2020 interview. However, he acknowledges that since last year, there have not been many new listed companies in the Resource Mall, and the overall market value has declined. Currently, it is not a good opportunity for corporate IPOs, and “going public overseas is also a choice.”.
Photovoltaic business has been a new driving force for Skyworth’s growth in recent years. Skyworth Photovoltaic Company was only established in 2020, and its main business is distributed photovoltaic power stations for household and commercial use. Currently, its expenditure has reached 33.83%. According to Skyworth Group’s annual report, the business had a total expenditure of 23.354 billion yuan in 2023, an increase of 95.28% year-on-year, almost doubling.
Dealers participating in the sports event criticized the interface message, stating that Skyworth’s photovoltaic business is characterized by “growing well in the village”, occupying the roofs of many rural households, sinking sufficiently, and also having brand power to support it. Therefore, even in the sluggish growth of the home appliance industry in 2023, its photovoltaic business is expanding.
The key to Huang Hongsheng’s own miracle lies in Skyworth Auto. In 2010, as he entered his 60s, he resumed his business and established the Hewo Automobile Group in Nanjing, restructuring and purchasing Nanjing Jinlong Bus Manufacturing Co., Ltd. He then joined the passenger car category in 2019. Skyworth Motors is its passenger car brand. He said that currently 80% of his energy is focused on the automotive business.
At the sports scene, the interface news reporter saw that a Skyworth model that had been priced at over 100000 yuan had been reduced to 99800 yuan, hoping to be hit by the current trend of new power vehicle depreciation.
Similar to Skyworth Home Appliances, Skyworth Motors used to have the slogan “no village trapped in the city” and wanted to expand its channels, so its product prices were mainly in the middle and low end. From the perspective of shopping malls, according to data from the China Passenger Car Association, the sales of Skyworth EV6 in January 2024 were 400 units, accounting for 40.00% of Skyworth’s car sales and ranking 200th in SUV sales, belonging to the rear position.
Huang Hongsheng candidly stated that the mid to low end prices of 100000 to 200000 yuan in the new power car mall are a red ocean of “life and death”, so it has also eliminated mid to high end models priced around 300000 yuan, in order to meet the needs of high consumption users in overseas countries with huge wealth disparities to switch to electric vehicles. In overseas shopping malls, Skyworth plans to establish an assembly plant in Europe this year and also set up factories in Southeast Asia and South America.
“The automotive business (referring to Skyworth Motors) is not profitable, but we are one of the companies that have suffered the least losses,” he hopes to run for it in the long run. “We may not necessarily win the championship, but we need to run to the end.”