- The company based in Guangdong province saw year-on-year growth in TV sales in the US in the past three weeks, as more people stuck at home turned to the small screen for entertainment
- TCL’s upbeat forecast runs contrary to a gloomy outlook for the global TV market, with shipments seen diving by up to 8 per cent
TCL Electronics Holdings, the world's second-largest television maker by market share, is confident of achieving sales growth this year in spite of disruptions caused by the global coronavirus outbreak.
The company based in southern China's Guangdong province recorded year-on-year growth in TV sales in the US over the past three weeks, as more people turned to TV an essential source of entertainment under broadening social distancing measures, chief executive Wang Cheng said during a post-results press conference on Monday. He did not specify the extent of the increase.
TCL believes its cheaper models make it more attractive to American consumers with less money to burn amid rising unemployment and lower wages, lifting sales even as the wider industry takes a hit from slowing business activity and travel restrictions.
It also expects strong growth in the second half of the year, driven by government stimulus money, assuming the Covid-19 pandemic is brought under control globally by the end of May, Cheng said.
"We remain confident overall in our sales in 2020," said Wang. "Our advantage in the mid to lower-end price range products could help us achieve a larger market share after business activities return to normal."
The US last week rolled out a US$2 trillion stimulus package, the largest in history, to shore up an economy being pounded by the pandemic. Individuals can get direct payments of up from US$1,200 under the plan. The country has overtaken China with the largest number of Covid-19 cases in the world.
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TCL's upbeat forecast runs contrary to a gloomy industry consensus on the outlook for the global TV market among market research firms. Global TV shipments could decline by 8 per cent this year to 212 million units, compared with 4 per cent growth last year, Counterpoint Research predicted in a report last week. Meanwhile, TrendForce forecast shipments could drop 6 per cent this year.
The Covid-19 pandemic came after a year of fast growth for TCL. The company reported a 119 per cent jump in net profit to HK$2.28 billion in 2019 from the year before, driven by strong expansion abroad. Total shipments rose 12 per cent to 32 million units, with overseas markets accounting for 42 per cent of them, up from 37 per cent in 2018.
The public health crisis is an opportunity for TCL's internet business, which includes online video streaming and games. The number of subscribers to its internet services soared 139 per cent during January and February from the same period last year, it said. The segment only makes up a tiny portion of the company's overall revenue now, but it plans to expand it into an important source of income that could contribute to half of its profit by 2023.
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The company occupies 13 per cent of the global TV market in terms of shipments, trailing only behind South Korea's Samsung, according to industry data provider Sigmaintell Consulting.
Shares of TCL dropped 4.7 per cent to HK$4.28 on Monday.
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