Chinese electronics giant Skyworth Group Limited (Skyworth Group) is expected to see a 50% drop in net profit in the first half of this year. This follows a sharp 46.9% decline in net profit in 2024, marking another significant decrease for the company. Meanwhile, Skyworth Digital Co., Ltd. (Skyworth Digital), a subsidiary of Skyworth Group, has forecasted a potential maximum 76.35% decline in net profit for the first half of the year.
In its profit warning, Skyworth Group stated, “Unaudited comprehensive management accounts indicate that the post-tax surplus of the Group is expected to decrease by approximately 50% compared to the post-tax surplus for the six months ending June 30, 2024.”
Following a 46.9% decrease in net profit in 2024, this represents another decline in net profit for the company.
Skyworth Group explained the reasons behind the decline in performance in the profit warning, citing the continued downturn in the domestic real estate market and a slowdown in the sales growth of residential housing, indirectly affecting the sales volume of consumer electronics. The decline in performance is also attributed to the impact of the performance of the smart system technology business segment. Due to market competition, the selling price of smart terminal devices has significantly decreased, leading to a year-on-year decline in operating income and gross profit margin.
According to data from the National Bureau of Statistics of China, in 2024, the nationwide sales area of new residential housing was 973.85 million square meters, a year-on-year decrease of 12.9%, with a 14.1% decrease in residential sales area; the sales amount was 96.75 trillion yuan, a year-on-year decrease of 17.1%, with a 17.6% decrease in residential sales amount. The slowdown in the sales growth of residential housing indirectly impacted the sales volume of consumer electronics, as Skyworth Group’s main products are concentrated in the television, refrigerator, and washing machine sectors.
Furthermore, Skyworth Digital suffered a more significant decline in performance. In the company’s “2025 Interim Performance Forecast” released on July 8, it is estimated that the net profit attributable to the parent company in the first half of 2025 will be between 43 million and 63 million yuan, a year-on-year decrease of 76.35% to 65.35%, with a non-net profit decrease ranging from 76.27% to 64.73%. This marks the third consecutive year of declining performance for the company.
Overall, Skyworth Group has been experiencing declining profits since 2021. Public data shows that from 2021 to 2023, its net profits attributable to the parent company were 1.634 billion yuan, 827 million yuan, and 1.069 billion yuan, respectively. In 2022, the net profit saw a significant decline of 49.39%.
Established in 1988, Skyworth Group Limited primarily engages in smart home appliance business (television, smart operating systems, refrigerators, washing machines, air conditioners, kitchen appliances, small appliances, etc.) and smart system technology business (digital smart set-top boxes/gateways/networking, spatial computing XR, car-mounted intelligent display assemblies, industrial control display modules, IOT solutions), with two listed companies under the group, Skyworth Group and Skyworth Digital.
As of the closing of the market at 16:00:00 Beijing time on August 11, Skyworth Group’s stock price was reported at 3.22 Hong Kong dollars per share, with a total market value of 6.092 billion Hong Kong dollars.