TCL Huaxing Optoelectronics has lost 428 million yuan in short term

Although the profitability of multimedia and home appliance business is not bad, the performance of TCL Group has experienced a sharp decline due to the drag on its LCD panel production line Huaxing Optoelectronics. In this regard, industry insiders said that China Star Optoelectronics is a microcosm of China's panel companies, despite the rapid growth, but the possibility of short-term profit is very small.

According to the semi-annual report released by the TCL Group, the entire group achieved a net profit of 480 million yuan, a drop of 43.7% year-on-year. Among them, TCL's total investment of 2.4 billion yuan in liquid crystal panel production line project - Huaxing Optoelectronics' operating loss reached 428 million yuan. For the reasons for the huge loss of Huaxing Optoelectronics business, TCL said in the semi-annual report that the project is still in a stage of rampant output, and the current panel industry is in a downturn of the cycle, which led to a loss of 428 million yuan in operating losses of China Star Optoelectronics.

Relevant data show that since the production of Huaxing Optoelectronics in October 2011, it has not been profitable. In 2011, China Star Optoelectronics had a net loss of 146 million yuan. If the government subsidy of 330 million yuan is deducted from the project, the operating loss will reach 476 million yuan. In the first half of this year, China Star Optoelectronics realized revenue of 1.126 billion yuan and realized a net profit of -22 million yuan. If the subsidy income deducted during the period was 421 million yuan, its operating loss was as high as 428 million yuan. From 2011 to the present, the total operating loss of China Star Optoelectronics has reached 904 million yuan. The industry is concerned that with the mass production of domestic LCD panel lines, Huaxing Optoelectronics may not be able to recover its costs.