Hisense Electric Co., Ltd (Public, SHA:600060), Sichuan Changhong Electric Co., Ltd. (Public, SHA:600839) and TCL Corporation (Public, SHE:000100) are all involved in electronics manufacturing, with special emphasis on televisions. These companies have shaped the homes of people across the globe by offering customers cutting-edge technology. These companies dominate the domestic market, but all are looking to expand, or are already expanding in a global market. The board is set, who will be the victor?
Many giant companies that are around today have been around for a very long time, and that is generally true for the current Chinese dynamic that exists today. However, some companies are able to dominate a market in a very short amount of time. TCL is a company that has generally been off the radar of the global community until about 10 years ago when it decided it wanted to be a multinational company and a global competitor in consumer electronics. The companies that have been around for a long time are trying to make sure that their market shares do not get consumed by a rival company, but who can prepare for the unknown?
Hisense Electric Co., Ltd was originally set up in 1969 with 10 employees and a little over $100,000 in fixed assets. Hisense translated means “All rivers flow into the sea” and “Credit knows no bound”. That is very remarkable and reminds me of corporate giants that exist today and have dominated markets with their brand identity and quality products. The company was originally involved in producing semiconductor radios. In 1979, the company was approved by the state to produce televisions. Hisense Electric has been making sure that they stay on top of the newest technologies available. From creating a state-of-the-art research center to going green, this company is going to be around for a long time. Hisense Electric Co., Ltd has a market cap of $11.71 billion and their stock is currently valued at $13.51 per share.
Sichuan Changhong Electric has established in 1958 and is now one of the largest consumer electronics manufacturers in China. The company went public on the Shanhai Stock Exchange in 1994. One out of every four televisions in China is a Changhong TV. Changhong commits itself very extensively to R&D. The company has set up joint laboratories with Toshiba, GE, TI, Sanyo, Samsung, Microsoft, LG and Phillips. The company has a goal of continually participating in the development of the global digital industry. The company has $2.2 billion in turnover in 2005 alone. Sichuan Changhong Electric Co., Ltd. (Public, SHA:600839) has a market cap of $11.76 billion and their stock is currently valued at $4.13 per share.
TCL Corporation started off in electronics, household appliances and eventually telecommunications in 1985. The company was listed on the Shenzhen Stock Exchange in 1993 and launched their first cordless phones in China in 1994. The company has developed, merged and acquired its way to the top and delivered digital products all across China. The company offers digital cameras, digital photo frames, portable DVD players, washing machines, refrigerators and much more. The company accomplished most of this in less than 10 years. Imagine what TCL can do in 20 years. TCL Corporation (Public, SHE:000100) has a market cap of 12.01 billion and their stock is currently valued at $4.09 per share.
These companies are demonstrating that innovation is the key to success in the consumer electronics market. Some have paired with companies that have been around ever since electronics first came into existence, and these companies are proving that they can make anyone succeed. Distributing consumer electronics and creating a competitive advantage in the marketplace in not something for amateurs, but TCL has proven that a ferocious attitude to succeed can tip the scales in your favor. These companies have diversified their portfolios by selling many different forms of electronics in order to make sure that they do not miss the next big ride. With cutting-edge research and development occurring in China, it will be interesting to see some of the gadgets and gizmos that start pouring out of this region of the world.
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