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Li Dongsheng’s New Long March: “TCL Group” changed its name to “TCL Technology”

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Li Dongsheng, 62, is one of the longest-running entrepreneurs on the Chinese business scene.The TCL Group he co-founded has been established for 38 years.Today, he is leading TCL on a path of far-reaching change.On January 13, TCL Group issued an announcement saying that the company’s name would be changed from “TCL Group” to “TCL Technology”.As the name suggests, from the perspective of TCL, the latter can more accurately express the company’s “technical sense”-this is also the strategic positioning of the new stage of TCL.The name change dates back to last year.In January 2019, as approved by the shareholders’ meeting, terminal businesses such as home appliances and mobile phones were formally divested from the TCL Group. Listed companies retain only semiconductor display (Huaxing Optoelectronics) and industrial investment.Li Dongsheng admits that the key reason behind this reform is: two assets with very different models and better development of separate operations. After the spin-off, the listed companies focused on the semiconductor display field.Consistent with the spin-off action, the reform of TCL is the logic of subtraction.In 2017 and 2018, TCL successively divested 62 non-core subsidiaries, and the number of secondary companies in the group has been greatly reduced.For Huaxing Optoelectronics, Li Dongsheng has devoted a lot of enthusiasm. In the past few years, TCL has invested a total of 180 billion yuan in the fields of semiconductor display, technology and materials, and built 6 factories, including 4 factories by the end of last year.Full production.Among the company’s current fixed assets, TCL Huaxing Optoelectronics accounts for more than 70%.A set of data can indicate the positive effects of this reorganization.The most intuitive thing is that the market value of TCL Technology Group has increased by 87% compared with before the reorganization.At the business level, from January to September last year, sales revenue was 41.2 billion yuan, an increase of 19.2% compared with the previous year, and net profit was 3.49 billion, an increase of 21.3% over the same period last year.The inventory turnover days decreased from 49 days to 44 days.Of course, given the industry-wide adjustment of the semiconductor display industry, the revenue of Huaxing Optoelectronics has been greatly affected.”In the first quarter of last year, domestic manufacturers were profitable, and overseas manufacturers were losing money.” Li Dongsheng said that TCL’s profit margin remains at 4.6%, but he is optimistic that the semiconductor display industry this year will be better than 2019, “It is expected that the overall supply will still exceed supply, but the ratio of oversupply will improve compared to 2019. “Li Dongsheng revealed that Huaxing Optoelectronics’ current annual orders have exceeded production capacity and are making some adjustments.Previously, TCL Electronics and Samsung TV were their two largest customers. Today’s customer structure is also being optimized. For example, according to the plan, they will increase their supply to Sony this year.For TCL’s start-up terminal business, such as color TVs, it has now achieved the third largest global brand sales.Li Dongsheng described the semiconductor display industry in which Huaxing Optoelectronics is located as “a high-tech, asset-heavy, long-cycle industry”, so what he needs is long-term money.Although this doesn’t sound as sexy as some new economy industries, Li Dongsheng believes that the benefit of investing in TCL is that “it allows you to make stable money and sleep well.”A figure he disclosed is that TCL Technology Group’s dividend rate to shareholders is maintained at around 40% every year, which is far higher than the general level of the new economy industry.In addition to the semiconductor display industry, Li Dongsheng also told 36 氪 that the reason it was renamed “TCL Technology” instead of “TCL Huaxing Optoelectronics” was precisely considering that in addition to semiconductor display, they would also choose to open new tracks.Although he did not disclose the specific reason for the new track, he emphasized that it must also be a “high-tech, asset-heavy, long-term” field, and an “entry barrier, a technical threshold, and a large amount of investment”.Regarding his long-term optimistic printing display technology, Li Dongsheng believes that TCL has already taken the lead in the world. Currently, only Samsung, Japan JOLED and TCL have in-depth research on this technology.At this year’s CES exhibition, Guangdong Juhua, a subsidiary of TCL, demonstrated a 31-inch printing display prototype.Obviously, TCL is trying to bet on the next era with a new round of change, but looking back at the historical context of TCL, it has never been a company lacking change.From the initial home appliance business, to later global brand companies, to today’s high-end, core device manufacturers, Li Dongsheng has always been looking for a new growth curve for TCL.In 2006, 49-year-old Li Dongsheng wrote five articles with the theme of “Rebirth of the Eagle” with a spirit of enthusiasm, comprehensively reflected on TCL’s corporate culture and company strategy, and then started a weight-loss campaign, decisively cutting off smart buildings.And other uncompetitive businesses, and heaving money into the semiconductor display industry.TCL has gradually transformed from To C to To B.On the day of the name change, TCL’s stock price rose steadily, and the increase of 2.14% did not seem to be astonishing.The changes in TCL today may still need to be observed in a longer time dimension, but as Li Dongsheng said: “The advantages of large enterprises are their advantages in long-term development strategy, planning and management.”

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