Annual report on why the sudden loss TCL2006 so much

World marketing comments (http://mkt.) 　　April 30th, 2007, TCL Group publish 2006 annual report and in the first quarter of 2007, a quarterly bulletin, a win-loss, highly dramatic effect. Realistically speaking, I in losses in TCL2006 expected, you may wish to retrieve my published in early 2006, when I have an article on TCL in the coming years the trend has been forecasting business. However, all of a sudden loss of 2006 19.32 billion, still out of my expectation, I originally forecast losses amount to 12 billion, not to want to be!

Why all of a sudden loss of so many? TCL's explanation is: multimedia European area losses as high as $ 25.96 billion proportion according to the equity group 10.06 billion, in addition to the multimedia, the Group also has 9.26 billion deficit.

I think the TCL interpreted worth pondering.

First, how did the Europe losses? what?

TCL's explanation is: European market to flat-panel TV transition faster than expected, and TTE European old system, team cannot adapt to the change.

It should be said that this half right.

From CRT to flat-panel TV transition is the trend, as a TV producer enterprise, TCL had failed to make accurate industrial development direction, which was an unforgivable mistake.

In fact, industry observers, it seems, cannot access the pulse of the industry transformation, is a major fault, TCL European market high marketing costs, probably From emkt.com.cn is the biggest problem of the loss. A rely on cheap labour for the survival of the enterprise, how could rely on European high labor costs to survive?

This is the second major TCL2006, restructuring of the European market.

This reorganization, actually let the TCL back in 2004, the acquisition of origin before Thompson.

In other words, the acquisition of Thompson had become meaningless.

Secondly, the Group's other industry losses 9.26 billion is going on?

This indicates a problem: TCL group in addition to color TV in Europe, the Americas and emerging markets form a serious losses, other industries such as computers, white, cultural industries are already in trouble, and quickly became the Group's second largest source of losses. But before that we generally believe that TCL group losses mainly from TV markets overseas, now that the situation is not as simple as we imagined. This case shows that the plight of TCL color TV industry, has spread to other industries.

This is pretty terrible. Mean that even if TCL TV through efforts in overseas markets for the deficits of reaching accords, other industry still possible to bring great losses of Tcl group, causing the entire group is difficult in a short time out.

2007 can profit by normal people thinking?, such huge losses in 2006, 2007, is not likely to achieve profits that at best only is gradually increased. For example: 2006 loss 19.32 billion in 2007, increased to $ 1 billion in 2008, further increased to $ 300 million, the profit can be achieved in 2009. According to the principle that should be of such a process.

However, TCL is now presented to us: TCL2006 year Ltd 19.32 billion in the first quarter of 2007 was $ 1387 at a profit. This is a very funny things. How do you understand? we can only be understood as a financial processing skills, the 2006 loss possible amplification for 2007 skimmed a relatively clean of TCL.

In fact, such a trick had been used. My second ruling CHANGHONG, is so dry, NI runfeng ruling last year of the loss be 37 billion, excluding a relatively clean CHANGHONG.

Why do it? "is simple: since 2006 deficit that simply let the enterprise thanks to some, so that the profit for 2007 easier. For now the TCL, nothing is more important than profit, the profit can let the investor confidence again, profitability can keep not delisting, profit even morale. Over the past few years, up to every day called TCL win, don't win has been unable to shareholders, to their staff.

The problem is that this kind of out of carriages, how much significance?

Real profits, should an enterprise development of operating losses, the enterprise profit value increase results. A senior financial officer said it: give a loss not too many companies make millions and millions of profit, is a very easy thing.

Out of the profit, not only useless, it is harmful. TCL and CHANGHONG, Zhao Yong can put off the old account to NI runfeng, Li dongsheng old accounts written off to? may also own carrying?

It's not hard to actually have layoffs, pay cuts. TCL in the past two years has also been done. The cast of advertising not voted, the strokes were recruited, overseas marketing personnel of withdrawals, Mexico, Poland, etc. overseas factories or lay-off or half downtime. Do bring two results: one is the reduction of operating costs, and the other is a rapid decline in the market. TCL mobile showed the most typical, because a large number of abolition of sales, leading to market has plummeted, domestic market share of less than 1%, was completely out of the top 10, the situation is quite chilly agitation.

Many inherited from Thomson to CRT TV factory, become the greatest burden of TCL, TCL will still be the greatest burden. Now, they basically are discontinued, but discontinued is not equal to get rid of the burden, and is not equal to solve the problem. In fast no CRT

Fall of today, these old factory direct face off or changing the selection. However, closed, or engaged, is not easy. Closed, the loss is too big, TCL simply cannot afford; transferring flat panel TV, domestic production capacity was enough TCL, there is a need for overseas production?

So, is the overseas factory instead of the marketing channel, is the TCL in the next few years development of the biggest problems. This is the most difficult to resolve. This is why I repeatedly say TCL three years is not possible to achieve real profits.

Of course, to achieve short-term profit TCL is entirely possible that the accrued costs not included in it, it's that simple. The problem is that the burden shed to tomorrow, only let tomorrow more sad, left baggage final also picked up by yourself.

Currently, the implementation of the deficits of TCL, basically boil down to "throttle" reduced losses, is repeatedly compressed operating costs. But we know that the cost is not possible has been cut down, in fact, today, TCL can cut costs has been very limited. Also, cut costs also must pay a huge market rapidly shrinking. In fact, this kind of "reduced losses also reduced market" has emerged: TCL group in 2006, operating income decreased over 2005 48.2 billion, reaching 9.33% decrease. It is expected that in 2007, this situation also occurs.

But I think this is a good thing for TCL, a healthy enterprise than a bloated company more valuable. As long as downsizing can make TCL become healthy enterprises, pay the price that is worth it. In the past that greed thinking big for many, the thrown into the Pacific.