Dongshan Precision: Revenue growth, LED business drags down profits

Recently, two influential companies in the field of LED display, Dongshan Precision and Konka, have successively released 2024 performance announcements, demonstrating their respective operating conditions and business trends in a complex market environment. These two announcements not only reflect the company's own development strategies and achievements, but also provide industry observers with an important window to gain insight into the LED display market dynamics.

Dongshan Precision: Revenue growth, LED business dragged down profits

On April 14, Dongshan Precision released its "2024 Annual Results Express" and "2025 First Quarter Results Forecast". Judging from the full-year results, its performance showed a divergence between revenue and profits. In 2024, Dongshan Precision's total operating revenue will reach 36.791 billion yuan, a year-on-year increase of 9.33%, indicating that the company has achieved certain results in business expansion and its core business has maintained a steady growth trend. However, the net profit attributable to the parent company was approximately 1.089 billion yuan, a decrease of 44.55% from the previous year. This sharp decline in profit attracted widespread market attention.
In-depth analysis of the reasons for changes in performance shows that the LED business has become a key factor affecting profits. In 2024, Dongshan Precision will implement operational management optimization measures for its LED business, integrate and optimize some inefficient equipment, resulting in an asset disposal loss of 164 million yuan in this process. At the same time, based on the market environment and asset conditions, the company provided an asset impairment loss of 595 million yuan on LED business-related assets. The combination of these two factors has resulted in a significant decline in net profit attributable to shareholders of listed companies in 2024.
However, looking forward to the first quarter of 2025, Dongshan Precision's performance forecast shows positive signals. Benefiting from the expansion of AI's demand for ICT infrastructure and consumer products, sales of the company's electronic circuits, precision components and other products, which are basic parts and components in the consumer electronics and new energy vehicle industries, have increased significantly. The net profit attributable to the parent company is expected to be in the range of 434 million yuan to 463 million yuan, a year-on-year increase of 50% - 60%; the net profit deducted from non-profit is approximately 392 million yuan to 418 million yuan, a year-on-year increase of 50% - 60%. This shows that the company's advantages in core business areas are gradually being transformed into performance growth drivers, and it is expected to achieve a recovery in performance in the new year.

Konka: Revenue fell, color TV and semiconductor businesses were under pressure.

On April 15, Konka disclosed its 2024 annual report, and its performance data was not optimistic. In 2024, Konka achieved total operating income of 11.115 billion yuan, a year-on-year decrease of 37.73%; net profit loss attributable to its parent company was 3.296 billion yuan, a year-on-year decrease of 52.31%; and net profit loss deducted was 3.206 billion yuan, a year-on-year decrease of 9.99%. From the perspective of business segments, each business faces different degrees of challenges.

In terms of color TV business, although revenue was 5.028 billion yuan, a year-on-year increase of 6.78%, it is still under great pressure. In 2024, Mini LED display technology will enter a stage of rapid popularization, and the retail sales penetration rate of the Mini LED market in China color TV will reach 9.8%. Konka actively deployed and created the Skymirror Mini AI-LED A8 flagship product series, and launched a 230,000-zone 110-inch Mini LED A8 PRO TV, making breakthroughs in product technology innovation. However, factors such as intensified market competition, continued fluctuations in the supply chain, and limited room for rigid cost drops have caused the color TV business to remain at a loss.
The semiconductor optoelectronic field is another key layout direction for Konka. The company focuses on the three business segments of Micro LED and Mini LED chips, massive transfer, and display, and makes every effort to promote the transformation of the optoelectronic business from technical research and development to industrial development. At present, the Micro LED laser transfer verification project has been accepted. However, as the semiconductor business is still in the early stages of industrialization and has not yet achieved large-scale and cost-effective output, it has had an adverse impact on the company's overall profitability. In addition, Konka focused on two rounds of main businesses in consumer electronics and semiconductors, and voluntarily withdrew from non-main businesses and businesses that did not empower the main businesses and continued to lose money. This was also one of the reasons for the decline in the company's operating income.
Overall, the performance of Dongshan Precision and Konka in 2024 reflects the complexity and challenges of the LED display industry. Although Dongshan Precision is facing difficulties in its LED business, the growth of its core business and the positive forecast for the first quarter of 2025 have brought hope to its development; Konka needs to focus on cost control and market competition response in the color TV business, and the industrialization of the semiconductor business. Continue to make efforts to improve its performance. For industry investors and practitioners, paying close attention to the subsequent strategic adjustments and business progress of these two companies will help grasp the development pulse of the LED display industry.