Skyworth Group, which has shifted its focus from television manufacturing to pursuing growth in photovoltaics, continues to experience challenges during its strategic transition. On March 30, Skyworth Group's stock closed down 3.03% at HKD 6.39 per share. This movement followed the company’s release of an annual report showing increased revenue but decreased profitability.
According to the financial results, Skyworth's revenue for the year rose 8.2% year-on-year to RMB 70.324 billion, marking a new historical high. However, net profit saw a significant decline of 27.8% to RMB 837 million, while net profit attributable to shareholders fell even more sharply by 37.3% to RMB 356 million.
Skyworth's business is divided into four main segments: Smart Home Appliances (including Skyworth smart TVs, refrigerators, washing machines, air conditioners, and kitchen appliances), Smart System Technologies (such as set-top boxes, automotive electronics, and XR), New Energy (including photovoltaics and energy storage), and Modern Services. Over the past year, these segments showed further divergence in performance. The New Energy business was the fastest-growing segment, with revenue increasing 16.5% to RMB 23.685 billion, accounting for 33.68% of total revenue. The other three segments all grew slower than the group’s overall revenue growth rate.
Specifically, revenue from the Smart Home Appliances segment increased 6.5% to RMB 35.656 billion. The Smart System Technologies segment reported revenue of RMB 8.523 billion, nearly flat compared to the previous year’s RMB 8.511 billion. The Modern Services segment saw revenue decline 8.5% to RMB 2.619 billion, making it the only segment to record negative growth.
Founded in 1988, Skyworth Group was once a benchmark in China’s color TV industry, with smart home appliances remaining its undisputed core business. However, as the traditional home appliance market became saturated, founder Huang Hongsheng turned his attention to the photovoltaic industry. Public information shows that Skyworth Photovoltaic was established in 2020, engaging in areas such as distributed PV power station system integration, PV product manufacturing, energy storage, operations and maintenance, logistics, overseas business, and investment. Leveraging the group’s home appliance distribution channels and customer base, its cross-sector "photovoltaic + home appliances" model quickly gained market traction.
A review of Skyworth’s recent financial reports reveals rapid expansion in its New Energy business: revenue from this segment surged from RMB 4.101 billion in 2021 to RMB 20.334 billion in 2024. This growth momentum continued in last year’s financial data, indicating a clear shift in the company’s business focus and revenue structure.
In light of this transition, Skyworth announced a major plan earlier this year involving the privatization and delisting of the group, coupled with a separate listing of Skyworth Photovoltaic on the Hong Kong Stock Exchange. The company stated that its board had approved the spin-off of Skyworth Photovoltaic, with plans for it to be listed on the main board by way of introduction. The existing Skyworth Group would be delisted through a share repurchase and cancellation.
Despite the rapid expansion of its photovoltaic business, Skyworth’s profitability has remained under pressure. From 2021 to 2024, net profit attributable to shareholders was RMB 1.634 billion, RMB 827 million, RMB 1.069 billion, and RMB 568 million, respectively. The latest financial report shows a further 37.3% decline to RMB 356 million. This trend is closely linked to the relatively low gross margin of the photovoltaic business, which has diluted the group’s overall profitability.
As early as 2021, Skyworth outlined its photovoltaic development strategy in its annual report, identifying distributed photovoltaics as the segment most aligned with its retail expertise and end-market focus. While this strategy helped the company quickly penetrate the market, it has also left it more vulnerable to industry-wide challenges such as overcapacity, price wars, and declining prices across the supply chain.
At a time when the new photovoltaic business has yet to fully contribute to profits, Skyworth’s traditional core business has also underperformed. In the smart TV segment, overseas sales showed strong growth, with revenue increasing 21.8% to RMB 9.885 billion. However, domestic sales faced clear pressure, declining 7.4% to RMB 11.781 billion.
Additionally, the performance of Skyworth’s two non-core segments was lackluster over the past year. The Smart System Technologies segment swung from a profit of RMB 170 million in 2024 to a loss of RMB 29 million last year. The Modern Services segment, affected by the downturn in the real estate market and impairment provisions, turned from a profit of RMB 305 million to a loss of RMB 34 million. Combined, these two segments shifted from a total profit of RMB 475 million to a loss of RMB 63 million—a negative swing of over RMB 500 million.
Taking these factors into account, Skyworth’s overall gross margin for the year stood at 12.8%, down 0.7 percentage points from the previous year. The company acknowledged in its report that the decline in gross margin was due to multiple factors, including narrowing margins in the Modern Services segment, rising raw material costs in the home appliance industry amid global supply chain tensions and U.S. tariff policies, and the significantly lower gross margin of the New Energy business compared to traditional home appliances.
It is also worth noting that while Skyworth’s old and new businesses are in a transitional phase, the company’s four major expense categories increased to varying degrees, further dragging down net profit. Sales and distribution expenses rose 9.7% to RMB 4.112 billion, while general and administrative expenses increased 9.9% to RMB 1.985 billion. Only research and development expenses saw a slight decrease of 0.7% to RMB 2.071 billion.
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