Shenzhen Konjia mid-year report revealed that hundreds of technical talents have been introduced to the Micro LED project, and new products are expected to be shipped in batches by the end of 2023.

On the evening of August 27, Shenzhen Konka A revealed in its 2023 interim report that it will be "customer-oriented and promote the scale of Mini LED sales" and also revealed that it has "introduced hundreds of industry technical talents to the Micro LED project." Because the company previously stated on the investor interaction platform on August 3: "It is promoting the scale of Mini LED sales and plans to achieve mass shipments of Mini LED chips and its commercial display products before the end of 2023," it has attracted much attention from the market. Since Mini LED is the leader in the new generation of display technology, this statement means that its ongoing transformation from "Konka Electronics" to "Konka Technology" will have an important breakthrough.

Be the first to lay out the future display technology track, Shenzhen Konka maintains technological leadership

MicroLED is an important technical direction for the new generation of display screens. Since MicroLED still has some technical difficulties and is difficult to commercialize in a short time, MiniLED can be understood as an early MicroLED technology solution.

As the mainstream trend and development direction of future display technology, the MicroLED industry chain is divided into four main links: upstream chip manufacturing and mass transfer, midstream panel manufacturing, and downstream complete machine application. The MicroLED industry is widely used and has a broad application market.

According to a research report from the Huatong Securities Home Appliances Group, Arizton data shows that the global Mini LED market size will be US$150 million in 2021, and the market size is predicted to grow to US$2.32 billion in 2024. Shenzhen Konka ranks fourth in the world in the number of MicroLED patents accepted, and ranks among the best in various subdivisions such as LED chips, epitaxy, mass transfer, and display technology. Therefore, relying on technological leadership can not only help the company quickly occupy the MiniLED market share and obtain excess returns in the blue ocean market, but MicroLED technology can also be applied to the company's existing color TV business, thereby improving the market competitiveness of the company's color TV products.

According to Shenzhen Konjia Zhongbao, its semiconductor business has been deployed in storage, optoelectronics and other fields. Among them, the storage field is mainly engaged in the packaging, testing and sales of storage products; while the optoelectronic field is mainly engaged in the research and development, production and sales of Micro LED related products.

It is worth noting that the company’s semiconductor business is still in the early stages of industrialization. Although it has made repeated breakthroughs in core technologies, it has not yet highlighted economies of scale and output. Therefore, regarding the strategy adopted by the semiconductor business, Shenzhen Konka emphasized that the first is to maintain technological leadership, and the second is to promote the industrialization of Micro LED in a market-oriented manner.

Proactively adjust the income structure, Shenzhen Konka accelerates its transformation to technological attributes

Shenzhen Konka is the first Sino-foreign joint venture electronics enterprise after the reform and opening up. After more than 40 years of development, Shenzhen Konka's current main business focuses on four major sectors: consumer electronics, semiconductors, materials technology and industry and trade. Among them, consumer electronics and semiconductors are the sectors that Shenzhen Konka attaches most importance to and is particularly focused on.

The figure below shows Shenzhen Konka’s revenue structure. Among them, the consumer electronics business mainly consists of multimedia business and white goods business. Its multimedia business is mainly the sales of color TVs, and white goods are mainly ice-washing, air-conditioning and freezers.

Chart: Research Institute of Listed Companies in the Financial Industry; Data source: Juling Finance

The interim report shows that Shenzhen Konka is accelerating the adjustment of its business structure and has proactively optimized some industrial and trade businesses that are not highly synergistic with its main business and have low gross profit levels. Its share has dropped from more than 60% last year to 41% this year.

In 2023, consumer demand in the consumer electronics industry will continue to be sluggish and market competition will become increasingly fierce. Shenzhen Konka's consumer electronics business will inevitably be affected and its scale will decline. Shenzhen Konka said that in this regard, it will focus on the development of its main business, strengthen lean management, optimize asset allocation, accelerate the semiconductor scale process, and effectively improve profitability.

In terms of color TV business, on the one hand, Shenzhen Konka will use its Micro LED R&D advantages and industrial advantages to create technical barriers, extend the industry upstream, and drive the upgrading of the color TV industry;

On the other hand, we will consolidate our high-end manufacturing advantages, actively integrate into the third-party ecological chain, focus on key components in the short term, build an intelligent manufacturing platform based on technology research and development, high-end manufacturing, and supply chain in the long term, and incubate diversified intelligent hardware businesses. It has established an academician workstation and built a technology research alliance that matches the industrial layout. It has nearly 100 core key technologies and a R&D team of about 1,500 people, and has introduced hundreds of industry technical talents to the Micro LED project.

In addition, in terms of marketing, Shenzhen Konka will reconstruct and optimize "online + offline" high-margin channels, focus on developing emerging channels such as interest e-commerce, strengthen brand rejuvenation, and improve operation and channel efficiency.

In terms of white goods business, Shenzhen Konka promotes brand diversification through the "Konka + Xinfei" dual-brand strategy, strives to build the first-line brand image of refrigerators, comprehensively improves the brand operation capabilities of air conditioners and washing machines, and expands the company's industrial scale in the field of white goods through the dual-brand collaborative development strategy.

At the same time, we are actively deploying diversified categories, accelerating the production and implementation of kitchen and bathroom products such as dishwashers, and using the Xinfei brand as a breakthrough point to achieve a diversified layout of white appliance categories, and actively explore new directions for the integrated development of home appliance categories.

It is true that enterprises will inevitably encounter certain setbacks and difficulties on the road to transformation and upgrading. However, by firmly being driven by technological innovation, it is expected to quickly get out of the "painful period" of transformation and growth. We look forward to Shenzhen Konka further consolidating the technology moat in the Micro LED field and creating a second curve beyond the consumer electronics business as soon as possible.