Hello, everyone. Welcome to Haixing News Agency's in-depth interpretation of the phone call. All participants are in silent mode at the moment. I will now start the announcement. After the announcement, the host will speak directly.
This conference is only for professional investors and clients. The content of this conference is only representative of their personal views. All information or views do not constitute investment advice. Any organization or individual is not authorized to publish in advance. Thank you for your understanding and support. Thank you.
Good morning, investors. Welcome to the fourth session of the SeaXin series of in-depth reports. First of all, this meeting will be shared by me and my colleague Peng Zihao.
This report is also the fourth part of our series. In fact, in each part, we still hope to have a deep topic to do a deep exploration of a part that everyone is more concerned about. The fourth part is also that we hope to discuss from all over the world, from different continents, if domestic brands go abroad, for example, in North America, in Europe, in Asia Pacific, in the Middle East, what kind of potential scale market they are facing, and what kind of potential scale market
First of all, let's take a look at the history of the rise of domestic television in the world. Sony and Samsung are two names that cannot be bypassed. Especially Sony, which dominated the global television industry before 2005.
It was the era of black and white TV and CRT TV. But the turning point was very subtle. There was a very important technological change between 1995 and 2005.
Those who are familiar with it should know that in the era of liquid crystal panels, it was only in 1995 that it entered a high-speed development stage. Samsung also chose to invest heavily in liquid crystal panels at that time. So, with them in 1995, 1996 and 1998, after the second-generation, third-generation and 3.5-generation of liquid crystal panels, it soon launched a 40-inch liquid crystal TV in 2001.
At that time, the ultra-large size, thin body, and high-definition image quality subverted the traditional CRT TV. So in 2005, after Samsung's 7th generation was launched, even Sony, the global leader, had no choice but to use Samsung's panel to launch its own LCD TV.
On the other hand, Samsung, with the help of Sony's backup, has effectively created its own high-end brand image. This is similar to the relationship between Samsung's mobile phone and Apple's mobile phone. So, overall, Samsung has quickly realized its superiority in terms of its product, and has also created its own high-end image in terms of its brand.
So from 2006 to this year, 2024, Samsung has dominated the global TV market for 17 years. But what's more important is that from 2001, when Samsung launched its first night TV, to 2006, when it surpassed Sony and became the global leader, it only took 6 years. On the other hand, today,
At present, we think that this year, the penetration rate of MiniLED TV in China has reached 20%, and the penetration rate overseas is also rapidly exceeding the double-digit rate. In fact, it indicates that the future potential of domestic TV can surpass Samsung and become the world's new leader.
Especially from the data point of view, in the post-pandemic period of 2022, if we look at the financial reports of LG Electronics and Samsung Electronics, we can clearly see that their TV business scale, from the middle of 2022 to now, has basically declined for 6 to 7 quarters in a row.
It corresponds to the domestic brands, including Haixin and TCL, which have continued to expand their revenue in the past 6 or 7 quarters. Therefore, in terms of sales, Haixin and TCL officially surpassed IoG in 2022 and became the second and third largest companies in the world. As for the number one, the distance between Samsung and IoG is also being shortened.
From a longer-term perspective, we believe that with the launch of LG's Guangzhou panel factory in 2024, China's panel factories, represented by Jingdongfang and Huaxing, will have an overwhelming cost advantage over South Korea. As time goes by, after 20 years of long-term efforts, we will find that in the entire liquid metal industry, the top-level panels
and has an overwhelming right to speak. Similarly, when it comes to the rise of the whole brand, this is basically a definitive direction. More importantly, we can see that the flagship of Haixin is the laser TV, the mini-LED TV, and its self-proclaimed image chip, and the A.I. computing. These differentiated leading advantages are quickly helping Haixin to occupy the right to speak of a new round of high-end TV.
So, we can see this clearly from the domestic situation. Under the overall pressure of the domestic high-end TV, Haixing's retail market share has exceeded 30% for the first time. This is a turning point that is rarely seen in domestic long-term competition songs that criticize relatively scattered electricity. In terms of overseas, we think that under the advantage of the new round of product differentiation, the increase of overseas penetration rate and the rise of bad rights
and the rise of brand price index. These three elements are basically a definitive direction. So this year, under the sponsorship of the European Cup and the American Cup, once the popularity of overseas brands is further expanded, it will definitely let overseas consumers see the progress of domestic brands.
So, back to the title of this report, China is number one, not only the second in the world. In fact, it is also the slogan of Haixin in this year's European Sports Festival sponsorship process. So I think it is a very representative moment to discuss and re-revisit some companies that have the standard of going out to sea.
Recently, people are worried about whether the globalization of overseas enterprises will be successful. There may be a variable in the increase in trade friction barriers. Recently, investors who care about the general election have also started to discuss what to do if Trump comes to power in the U.S. election and imposes 60% import tariffs on China.
We believe that the sea-based video, including TCL, is a very successful example of the path of these domestic TV brands going out to sea. Let me summarize. They have been through the continuous overseas layout for the past 20 years. This includes, but not limited to, overseas investment and construction at the production end of the supply chain, overseas layout at the production and development center, and overseas personnel layout at the marketing end.
For them, the globalization of the three-in-one market has already been engraved in the company's genes. For example, if Mexico is in the Mozambican trade circle,
including Haixin, Samsung, LG, and TCL, the world's top four brands. Basically, they all set up factories in Mexico to serve the entire North America, and even the entire Americas. So we believe that the choice of this industry chain, Mexico, is not only the choice of Chinese brands, but also the choice of Korean brands, Samsung, LG. The factories are basically all located in Mexico.
Secondly, from the perspective of trade protection, if it is to protect the jobs of American local workers,
In other countries, there are products with strong competitiveness, and they build high-strength barriers. In fact, there is no such necessity in the United States. Because from the manufacturing part of the United States, they don't have their own production part of the TV. The supply chain, from the upper panel to the middle module to the lower assembly, basically, there is no worker needs to protect the whole part.
Let's take a step back and see if there are any strong local brands that need to be protected. In fact, there is no such thing. Because if we look at the pattern of global TV brands, the main competitor of domestic brands is Samsung and LG in South Korea. In fact, in the past, the entire United States, including Europe, has basically lost the so-called local brand.
In the past years, the rise of Sony and Samsung has witnessed the decline of the industry. The strong brands in Europe and the United States have long been out of the TV industry.
So, firstly, there is no need to protect the brand, and secondly, there is no need to protect the workers' jobs in the manufacturing sector. So, in fact, the so-called tariffs for the TV industry are considered to be excessive. So, I believe that through the analysis of this report, we will also see clearly that the distribution of production capacity in major states around the world can fully make people believe that the company has the compatibility of the regional supply and demand.
which may lead to uncertainty in the new round of trade, which may lead to uncertainty in the new round of trade, which may lead to uncertainty in the new round of trade, which may lead to uncertainty in the new round of trade, which may lead to uncertainty in the new round of trade, which may lead to uncertainty in the new round of trade, which may lead to uncertainty in the new round of trade, which may lead to uncertainty in the new round of trade, which may lead to uncertainty in the new round of trade, which may lead to uncertainty in the new round of trade, which may lead to uncertainty in the new round of trade, which may lead to uncertainty in the new round of trade, which may lead to uncertainty in the new round of trade, which may lead to uncertainty in the new round of trade, which may lead to uncertainty in the new round of trade, which may lead to uncertainty in the new round of trade, which may lead to uncertainty in the new round of trade, which may lead to uncertainty in the new round of trade, which may lead to uncertainty in the new
We don't think there has been any change in this aspect. Because for a long time, people have not been able to feel the sharing of the results of overseas shipping. In fact, it is not the same as the overall international marketing company.
At the same time, the interests of executives and shareholders have been tied up in 2021 and the subsequent continued equity incentives, which actually solved this problem. So, from the perspective of company governance improvement, it continues to
and share it with the listed companies. Especially in the recent period, when you look at some of the company's actions, for example, the US-EU joint ventures and let the listed companies directly enter the overseas to do salt sales. This is a very, very obvious case. So from the sharing of the results of this operation, we think that this has not changed.
What is the second point that hasn't changed? The background of the whole industrial rise hasn't changed. We just talked about the focus on the right to speak from the panel, which brings the right to speak advantage compared to Korea or Japan in the entire upstream panel field of domestic brands. This is undoubted. At the same time, in terms of the trend of the new round of panel prices, especially after July, we saw some signs of loosening of the panel prices, starting to soften,
This is also a very beneficial environment for brands to improve their profitability. So in the second half of this year, or a little later, it is also beneficial for the overall brand to go out to sea and gain more profitability improvement possibilities.
Thirdly, in terms of the layout of the brands, after the acquisition of overseas branches, including Vida in China, the layout of the three brands, low, medium and high, is complete. Therefore, in the whole range, whether in China or overseas, it is basically through these two-brands or multi-brands, to enter the stage of the gold-plated series in major states around the world.
And it continues to show its potential in global brand sponsorship. At the same time, it also has an advantage in terms of product technology. Therefore, it continues to occupy the market share of Samsung and LG like a construction site. So we believe that Samsung surpassed Sony from 2001 to 2006. In fact, it took six years.
In general, we believe that TCL and Haixin have surpassed Samsung in the past 5 to 6 years. And the rise of the high-end right to speak on TV is opening a new page. This is particularly noteworthy.
So in the short term, you may be confused. For example, last year's QE in the fourth quarter was temporarily adjusted due to the rise in the price of the panel. But now we have entered a new stage. After the price of the panel starts to go flat or go soft again, in fact, overall, the entire domestic brand is entering a phase of accelerating business efficiency, improving profitability, and returning to the current stage of shareholders.
At this point in time, I think this report is also a good time to respond to some concerns of the market. Next, I will give the time to my colleague, Zihao, to help you analyze the details of the report in detail. Thank you. Thank you, Mr. Shi. Good morning, investors. I am Tong Zihao from Zhaohan Plus. As Mr. Shi just said,
This report is also the fourth sea-related information report since July 2022. It is also the third sea-related information report. In the first report, we focused on the diversified layout of sea-related information. It also pointed out that the company has entered a globalization harvest period. In the second report, we focused on the company's governance improvement, the improvement of profitability in various businesses, and the view that the mid-term target value is 500 billion yuan.
As Mr. Shi just said, this report focuses on the globalization of Haixing. We analyze the situation of the black market and the market competition in different areas. We also hope to see a clearer picture of the Chinese e-commerce brand climbing the global scale and even taking the first place. Speaking of e-commerce,
When it comes to electricity, domestic investors tend to think that this is a fast-declining, negative-beta industry. But in fact, if we look at the world, although the electricity industry has entered a maturity period, it is not as pessimistic as the fast decline of demand in the domestic market.
On the one hand, the mature market in Europe and the United States is not as mature as China, so the demand for TV content is relatively stable.
On the other hand, the penetration rate of many new markets is still in the process of going up. Therefore, the global TV demand has been stable in the past 10 years at a level of about 200 million to 240 million TVs.
At the same time, the retail price has a certain upward trend due to the upgrade of the structure of the overall military price in the generalization and the high-levelization. Therefore, the retail price performance is more stable, and the overall situation is in a stable and sustainable position.
Speaking of high-end, we have to mention that in the Chinese market this year, Minilab has become the main direction of the next wave of high-end, and there is a trend to continue to accelerate and release. During June and August, the domestic sales volume has increased by nearly 20 points since last year, and the product positioning can also be seen to gradually shift from a high-end selling point to a mid-high-end standard. From the market point of view, there is also a trend to gradually spread to the overseas market.
On the one hand, we can see that the technology of mini-net is helpful in short-term to reduce the synchronization level of power generation products. This is helpful in helping the industry to further optimize the market pattern. At the same time, since the LOD industry in China is relatively developed, a fierce competition in the domestic power generation market is also helpful in helping domestic brands to polish their products. Therefore, the mid-term is also conducive to further assisting domestic brands to accelerate their development.
In terms of the global market, the global TV market is still in a one-sided competition. Samsung's global share is close to 20%, which is the leading one. After that, Haixing, TCL, and LG formed the second camp. The share is around 10 to 13 points respectively.
After that, the share of brands like Xiaomi, Chuangwei, and Sony is at the level of a few digits. But if we look at the trend, as Mr. Shi just mentioned, the continuous cleaning of Chinese brands against Japanese brands is also a big trend in recent years. If we look at it from a regional perspective, the domestic TV market is a big camp of domestic brands. At present, it has basically completed a process of domestic replacement.
Haixing, TCL, Xiaomi, and other domestic brands have taken the lead. Samsung LG, which used to lead the market, is a Korean brand, and Sony and Sony are a Japanese brand. The total share is less than 10%. Haixing is currently leading the domestic market with a sales share of more than 26% and a sales share of nearly 30%.
At the same time, we also found that in the past few years, in the development process of the Chinese TV industry, as a panel industry, a support behind the competition in China and South Korea, the entire color TV industry is also actively promoting a high-end iteration of the industry. At present, the Chinese market, whether it is high-definition or large-screen, including MiniLED, which I just mentioned,
From this perspective, China is already leading the world, even ahead of other developed countries in Europe and the United States. High standardization is a necessary development direction for the global television industry. This is also a good product foundation for Chuhai, a Chinese-made brand.
In addition, if you look at the overseas market, there are about 2 billion TV channels in the world. In addition to China's 40 million channels, there are more Asian countries with a large population, which are Asian countries outside of China, and European and American developed countries with relatively good economic infrastructure, which are still important market demand sources.
In addition to China, the annual demand in the Asia-Pacific region is about 50 million units. In the North America and Western Europe, the annual demand is about 40 million units and 35 million units respectively. In the rest of the regions, such as Eastern Europe and Central Africa, the annual demand is about more than 10 million units. But these markets are emerging markets, so the penetration rate is still rising. At present, Haixin has also strategically divided these markets.
The Chinese market is the core of the company's basic board. The North American market is one of the largest markets in the world. It is also the engine market defined by the company. For the North American market, the company has also established a local supply chain layout, including a Mexican manufacturing center. At the same time, we also set up some local R&D centers in places like Silicon Valley, Atlanta and New Jersey.
As Mr. Shi just mentioned, this kind of localized manufacturing layout can help the company to enhance the advantages of the supply chain. On the other hand, it also helps the company to effectively avoid potential tariff risks.
In addition, since the North American market is a market of channel management, from the perspective of the company, we have been actively expanding the chain trading channels in the past few years. As you know, there are six major channels in the North American market, which are relatively important. From the current situation of Haixin, it has entered all the six major channels in North America, including Walmart, Costco and Best Buy.
And this is actually one of the core reasons why Haixing was born in the North American market. The European market is a strategic market for the company. At the same time, the European market is more special. It is actually one of the most military-priced markets in the world. In addition to the production layout like the Czech factory, and the layout of the R&D center in Slovenia, the company continues to open up the CO market through sports marketing.
In the past 10 years, we have seen a significant increase in the share of HSI in the COE market.
In the past three years, including this year, Haixing has been a continuous winner of the European Cup. Its share increase in the EU region has increased significantly since 2016 and 2020. However, the overall European market is still relatively scattered. Although Haixing's share is relatively good in Germany, Italy and France, the overall share is only at a level of a few digits.
So compared to the 25-point level of Samsung, there is still a big room for improvement. It just takes time to break through each market. The Japanese market is also a relatively advantageous market for the company. After the company acquired TVS, it relied on brands like Dongzhi and REXA to break through the high-end market in Japan. So Japan is actually a high-end market defined by the company.
Currently, in the Japanese market, Haixin has taken the first place in the industry with a 38% discount rate and a 40% discount rate.
In addition to the three markets mentioned above, the company also uses these mainstream markets to radiate some new and potential markets around it. In the middle, for example, through North America to radiate South America, through Western Europe to radiate Eastern Europe, and through Japan to radiate the whole of Southeast Asia, thus completing a global market layout.
So, we can see that Haixing has a clear plan for the path to globalization. At the same time, it also provides a good strategic foundation for the company's continuous expansion and brand upgrade in the future global scope. Next, I will focus on the main part of the report.
The first part of this report is a summary of the overall situation of the entire industry. The following five parts are basically a comprehensive demonstration of the overall situation of the market, the situation of market competition, and the overall layout of Haixing. The last part is a prediction and a steady analysis.
Yes, from the global market, as I just said, the global market, in terms of sales volume, is relatively stable. In addition to the impact of the pandemic in 2020, there is a certain demand for decoupling. After that, it slowly returned to the normal level of 200 million to 220 million units. And due to the increase in sales volume and military price, the overall performance is more optimistic.
In terms of regions, the Asian market is the largest, followed by the relatively large markets such as the EU and North America. As the overall market plate has entered a relatively mature period from the end of the volume, high-endization has become a common mainstay in the global electricity market.
From a high-definition perspective, the TV penetration rate of the global 4K resolution has increased from a small number in 2014 to about 80% in 2020. And in some markets, such as China, there is a trend of gradually upgrading to 8K.
In fact, the 4K resolution has not reached the end of its life cycle. Some markets are still working on replacing the 4K resolution. This year, the Spanish market has shown significant performance. They have an upgrade of the 4K resolution on the whole signal side. Therefore, this year, the Spanish market has shown a relatively good performance in the sales of the entire collection.
From a large-scale perspective, the average size of the global TV is gradually increasing at the level of 1 to 3 inches per year. So if we look at the global sales volume, in 2023, although the global sales volume fell by a double-digit compared to the high point in 2020, it actually fell by about 2 points from the point of order area.
In addition, when it comes to high-end, we have to mention the overall development trend of MediaLine. In the early years, this technology was mainly used as a high-end selling point on high-end TV, but with the explosion of the Xiaomi S Pro series in the second half of 2023, we can see that the most obvious feature is that all brands are taking the initiative to lower MediaLine technology to a mid-to-high-end market.
to gradually turn it from a high-end selling point into a mid-high-end standard attribute. So we think this will also make the data of the penetration rate of MeLiBit continue to exceed market expectations. In fact, we have also simplified the overall development trend of MeLiBit and made a certain recommendation. We think that the development trend of MeLiBit should be divided into three more important time nodes, and the current time nodes are probably in the middle of the second stage and the third stage.
The first phase is the post-single-point package, which was completed in the second half of last year. In the early years, people still sold MiLite as a relatively high-end product, so the overall sales were relatively small. However, Xiaomi wanted to make a breakthrough in the domestic market, so they made a key investment in MiLite. It was also the first time that MiLite technology was downgraded to a mid-to-high-end series.
This led to the explosion of Milad's products, and also led to a significant increase in Xiaomi's overall share in China. As Xiaomi's explosion of Milad's products and the explosion of the market, it triggered a series of market follow-ups. First of all, for the original leading brands, including Haixing and TCL,
they followed up with a technical path. The reason is simple. If they don't follow up with a technical action on Minilab, they may lose a leading position not only on the technical path of Minilab, but also a leading position in the overall black market in China.
So we can see that TCL and Haixing have made a positive layout and investment in the product line of Mirai. On the other hand, for the second and third-tier brands, everyone is willing to be the boss in the black market. For the second and third-tier brands, all of them are the same. So Xiaomi's product launch also provided a good example of turning to overtaking.
So this also pushed them to increase their investment. In the middle, you can actually see that in early May of 2014, in the first half of this year, there have been a total of 12 major brands that have released nearly 100 types of mini-LED TVs. In the middle, there are not only Xiaomi, but also Haixing TCL, which is the leading brand, but also Chuangwei, Kangjia, Changhong, Huawei, and other foreign brands. In fact, all of them have a series of digital products.
In the middle, Chuangwei's overall performance is also very outstanding. As these brands gradually invest, you can see several features. The first feature is that the number of mini-LEDs in the new screen is increasing rapidly. The second point is that the overall mini-LED, whether it is from the point of view of the number of zones,
or from a technical point of view, are all accelerating. This means that in the future, because of the selling point of Milad, we will gradually increase the number of new products from 10% to 30%, 50% or even 70% and launch them in the form of Milad products. This will quickly accelerate the trend of Milad's overall technology penetration.
So, what is the meaning of MeLive for Chinese brands? As I mentioned earlier, on the one hand, short-term is helpful to reduce the synchronization of products. This is helpful to further optimize the market pattern. On the other hand, because the domestic industry is relatively competitive, it can help domestic brands to quickly create a whole set of products. And this set of products has matured
to accelerate the expansion of overseas mid-to-high-end channels and the market. This can also help them to achieve a share increase and a brand upgrade. The third point is that if we look at it from the perspective of boom cost, the overall value of the traditional backlight panel is basically 20 to 30 yuan, while the current price of the backlight panel of Mi Lite is basically 300 to 500 yuan. This is a tenfold increase in value.
So, in fact, from the perspective of BOOM cost, the cost structure of the MiLED TV line in the black electricity industry will be relatively healthier. On the other hand, the traditional backlight TV, due to its backlight light board, is more synchronized. So, all the display effects, in fact, the main deciding element is only the LCD panel.
From the current point of view, these core parameters, including contrast and color, can be adjusted by the backlight module. So this can improve the self-reliance of the development of black-chip brands. At the same time, it can reduce the impact of upstream performance panels on them.
Looking at the global competition pattern, as mentioned in the previous presentation, Samsung has a 20% share of the market share, and it is also leading alone. One of Samsung's obvious features is that it has a large investment in each technology line, including MELAD, OLAD, and even MICROLED.
LG's global share has declined a lot in recent years. They are still focusing on OLED technology from a technical point of view. But this year, we can see that they have also made some strategic changes at the US CES. They released the first version of OLED technology.
a series of QNED TVs, also a MIRAID TV, and plans to cover the full size from 43 inches to 98 inches in the future. It also formally established a double-track strategy of two technologies.
As Mr. Shi said, after Samsung overtook Sony, Sony gradually focused on mid-to-high-end TVs. So, in terms of overall sales volume, Samsung's sales dropped a little bit more. At the same time, due to the overall speed of Mi Lite and OLED TVs, the overall sales volume is relatively high.
As TCL is one of the two subsidiaries of the Chinese brand, the global share is around 12 to 13 points, and it is also growing rapidly.
So, from this year's perspective, on the one hand, the North American market, TCL has made a breakthrough in the Best Buy channel, which has also effectively countered the impact of the Walmart channel. Secondly, they also made a major breakthrough in the European market. Overall, both in terms of sales and shares, there is a rapid upward trend. So, in fact, this year, it is expected that TCL's global shipment will continue to maintain a steady growth trend.
So, Xiaomi's global share is basically at the level of each digit. In the middle, the domestic shipment is still a big head. But this year, they have increased their investment overseas. And they also have a certain share of a breakthrough in domestic backlight technology.
From the perspective of Haixing, the total shipping volume of Haixing is more than 13 points, which is also a world-class location. At the same time, the company has always insisted on a strategy of self-manufacturing brands and high-end shipping.
So, from the perspective of its high-end product line, ULED, the overall volume of its delivery is far beyond the level of its company's overall TV delivery. This is also a positive boost to the company's brand price index, that is, the sales volume divided by the sales volume.
From the perspective of the overall brand strategy, Haixing is using a multi-brand strategy both domestically and internationally. Domestically, it mainly uses the main brand to deal with the competition from foreign companies, while the subsidiary Vida deals with the competition from Xiaomi and other mid-to-low-end brands.
In the past two years, this has effectively helped Haixing to achieve a share growth in the process of brand upgrading. This is actually a layout that is inseparable from the two-brand strategy.
Overseas, after the acquisition of TVS, the company is mainly using a dual brand strategy of Haixing and Dongzhi. For some countries that are not strong in Dongzhi, it is mainly promoted by Haixing as a major sales brand.
In some Southeast Asian markets, such as the Japanese market, the Dongzhi brand has become a key to help the company expand its market share and brand influence in these channels.
In terms of the market, let's talk about the Chinese market first. Before 2016, the Chinese market was still in a period of uptrend penetration. But since 2017, the overall penetration rate has reached a stage high.
At the same time, the Internet industry in China is developing rapidly, so we can see that whether it is content that can only be seen from the TV, and gradually transferred to medium and small sizes, including tablets, including mobile phones, or like Douyin, which is relatively fragmented,
This kind of content also takes up a lot of user time. All these disadvantages also lead to a constant decline in power consumption rate and power consumption market. So this also has a big negative impact on the overall demand of the industry. The overall sales are declining year after year. Sorry.
In the process of the gradual shrinkage of the overall sales, we can see that for the industry, high-end has become a common direction for the industry. At present, both from the level of smartization and from the level of large-scale and high-end, China is already a global leader. As mentioned earlier, this also provides a good product base for domestic brands such as Haixing TCL.
Looking at the overall market structure, the domestic market as a basic version of the domestic brand has completed the trend of replacing the whole domestic market. The domestic brands such as Haixing, TCL, Xiaomi, and Chuangwei have occupied the mainstream of the market. The market share of the original Japanese and Korean brands is less than 10%. Among them, Haixing, as a leading brand in China,
The sales volume is close to 27%, and the sales volume is close to 30%. From the perspective of the North American market, the overall sales volume of the North American market is relatively stable. It fluctuates between 40 million units. In the middle, the United States, as one of the largest markets, accounts for nearly 90% of the total demand.
From a structural point of view, although in the North American market, everyone thinks that Europe and the United States are relatively developed countries, but in fact, from a color market point of view, the military price performance of these two countries is relatively different. In the North American region, the overall military price performance is only more than 570 US dollars per unit, while the European military price performance is actually more than 1,000 US dollars per unit.
There are many factors in the middle, including the increased tariffs in Europe, and the overall average performance in Europe is relatively better than that of North America. However, the trend of decoupling and upgrading in the North American market is still continuing.
In terms of the seafood layout, the overall shipping volume of seafood in the North American market is about 11 points. But this is a process of rapid growth. In the past few years, the annual share increase has been around 1 point. First, let's look at the demand side. Because the North American market is actually a market dominated by channels. The breakthrough of the six major channels will bring an effect of increasing the number of shares for each brand.
From the past, the growth of Haixing depends on two factors. One is that Haixing aimed at the blank price range between the channel white card and Samsung LG, and quickly achieved a rapid increase through this blank price range. On the other hand, Haixing also achieved a rapid increase in brand awareness and a rapid increase in sales through Walmart, the largest channel in the U.S. market.
However, due to the large influence of the offline market in North America, it has the effect of rolling the snowball. We have mentioned this point repeatedly in the previous report. For offline channels, there is a limit on the resource price. Therefore, every time a new product is put on the market, it means that an old product must be removed from the price.
For the purchaser, if he wants to make a positive profit, he has to make sure that the sales of the new product is better than the old one. How can we confirm this? We can only use the market data of the past sales, which is the most convincing evidence.
But the question is, without better price resources and better electricity, how can we achieve a better sales performance? This is actually a problem of existing machines and existing orders. But on the other hand, this will also bring a positive rolling effect of these brands, that is, more prices bring better sales, and better sales bring more prices. The same is true for Haixing.
In the early stage, it achieved a good growth in sales through the channels like Walmart and Amazon. At present, it is also gradually starting to break through its high-end product line to the mid- and high-end market like Best Buy. Although the Best Buy channel is relatively different from Walmart in terms of sales in the US market, because there is a big difference in stores, one is a store with thousands of stores and the other is a store with hundreds of stores.
However, from the perspective of sales volume, these two companies are actually very similar. Therefore, we think that the breakthrough of the Best Buy channel will also have a decisive effect on the continuous rise of Haixing's share in the North American market and the continuous improvement of the overall brand positioning.
Secondly, in terms of supply-side layout, Kaixing has been sticking to a localized strategy. At present, five overseas distribution companies have been established in the main markets of North America and South America.
From the manufacturing point of view, after the company resigned in 2016 to acquire the Mexico factory in Xapu, it has continued to expand its production capacity through refurbishment and expansion to a level that is enough to satisfy the North American and South American markets.
Sorry. So, as Mr. Shi just said, the current market is worried about the potential tax increase in North America. From the perspective of R&D, they have set up a local R&D center in Silicon Valley, Atlanta and New Jersey, in order to better support the diversified product research of these overseas markets.
From the perspective of the European market, there is a big difference between Western Europe and Eastern Europe. In the past few years, the overall sales volume of the Western European market has fluctuated around 3.5 million units. But as mentioned before, the Western European market's military price is actually ahead of the global one, with a level of about 1.5 times the global one.
So the rise of the Western European market has a good effect on the military price of all brands, and it also has a good support for overall profit performance. In the Eastern European market, the overall market situation will be more complicated, and the market performance will be relatively divided, but the overall situation is still in a growing period. The annual export volume is about 15 million units.
In Eastern Europe, the Russian market has been affected by geopolitics and demand investment. So in 2021 and 2022, the Russian market will see a slight decrease in sales. However, in 2023, the market will start to recover.
Poland and Romania are doing relatively well and have entered a platform phase. Turkey has been affected by the domestic economy, so the overall sales volume has been declining since the peak in 2016, but the current sales volume has remained at a stable level. Ukraine is mainly affected by the Russian-Ukrainian war, but it has also gradually stabilized.
From the perspective of the production of Haixing, Haixing has deployed a Czech factory in Europe. The total production capacity is about 1 million units, and it is also a bridgehead in the European region to support the production capacity of the European market.
In terms of marketing, I have to mention the sports marketing strategy mentioned at the beginning. In terms of the overall share increase rate, in 2016 and 2020, the increase rate of the overall share of Haixing has increased significantly. We think there are two factors. On the one hand, the importance of the European Cup,
A sponsor can definitely help the company to increase the brand's popularity and brand's influence. This is definitely a big contribution in the mid-term consumer market.
Another important point is that the European market is relatively dispersed because of its overall channels, so everyone needs to spend a lot of energy to dig through each channel. And the sponsorship of the European Heavyweight Championship can also help them to quickly expand more offline channels. And this is also a significant help to the overall amount of money.
But although its share has improved rapidly and steadily in the past 10 years, the current situation is that the overall market in Europe is relatively scattered, so the overall market share in the European market is only less than 4 points. The company's goal is to break through 10 points, but this is actually 20 to 25 points ahead of Samsung, so there is a relatively large room for improvement.
Secondly, the markets outside of Asia-Pacific are relatively important, such as India, which has a relatively large population base. As you can see, the economy is still in a phase of rapid development, so its penetration rate is still rising.
From the price point of view, the average price in Asia is about the same as the standard level in the whole industry, which is about $600. From the situation of Haixing, the overall sales volume in the Asia-Pacific region except China is about 3.9 million units.
In the middle, there are some advantageous markets and short-term markets. There is no doubt that the Japanese market is a relatively advantageous market in terms of information. After the acquisition of TBS, it relies on Dongzhi and REXEL, which currently occupy the absolute first position in the industry. At the same time, the company is also gradually radiating to some Southeast Asian countries and allies around it through the Japanese advantageous market.
After the establishment of the East-East market in Haixing, we can see that the overall share price performance is relatively prominent. In Malaysia and Thailand, the share price has already broken through more than 10 points, and the share price in Malaysia is also in the top 3.
However, if we look at the overall sales volume of the entire Eastern European market, it is only at the level of five points. This is a big improvement compared to the Japanese-Korean companies that are in the lead, and compared to TCL and Youshang.
In order to support the development of the East Asian market, the company set up a material factory in Indonesia to promote local supply. At the same time, a new power plant was built in Vietnam.
The Indian market is also a market that the company will focus on and expand in 2021. This part of the company also hopes to feel a change in the overall industry closer through localization, and at the same time to better support the overall industry development.
As a relatively light-weight market, Zhongdongfei's overall shipment is less than 15 million units, but it is also one of the few markets in the world where sales are steadily increasing year by year.
In some countries, such as Alianz, South Africa and Egypt, these markets are relatively important in China. In fact, through some sports marketing strategies, such as the World Cup, Haixing has actually broken through the middle, including an important market like Alianz. At the same time, it is also expected to gradually radiate around the country through the Alianz market in the future.
From a production point of view, in fact, the company entered the South African market early in 1996 through its construction site in South Africa. At present, the TV production capacity of South African producers is basically at a level of about 1 million units. At the same time, in 2023, we also progressively lined up a R&D center in Dubai to strengthen the localization layout of a public banquet.
At present, 17% of the total share of Haixing is in the China-U.S. market, which is not at the level of the third-largest industry and is constantly improving. As the China-U.S. market sells more and more, the company also has a chance to make a profit in this market.
Finally, let's talk about profit prediction and valuation. First of all, in the case of Caidian, we expect that in the next three years, the company's time-saving income will be around 540 billion yuan and 620 billion yuan. The fluctuation in the middle is mainly due to the fluctuation in the price of the panel and the military price.
In China, we expect that the share of the future company will increase by about 1.5 points annually, and the interest rate will gradually increase under the influence of continued high-endization.
In addition, the price cycle of the panel may be a concern for the company's profitability. In my opinion, in the past, the panel industry has had a negative impact on the black-and-white industry. On the one hand, it is due to the relatively high cost ratio. On the other hand, it is also due to the development process of the panel in the past.
In fact, it is facing a competition between China and South Korea, so it often faces a large amount of investment and a large amount of output. This will cause a significant fluctuation in the price of the panel.
But based on the current trend, China and South Korea's competition is basically over. With LG's purchase of the factory in Guangzhou, South Korea's overall panel production capacity is basically clean. In this case, the price fluctuation of the panel is expected to be narrowed in the future.
This is actually a good support for the profit of downstream black electricity industry and its overall operational condition. Because only upstream nuclear resource materials are relatively stable in price. In fact, for downstream, it can gradually pass these costs down. But if it fluctuates significantly, it is actually difficult to make an early prediction.
In terms of overseas, this year is a big year for the sports competition, including the European Cup, the American Cup and the Olympic Games. So it is expected that this year's overall sales should have a relatively good growth, but it may also play a certain role in the next year's sales.
From the perspective of share price, it is expected that the overall share price growth trend will accelerate after this year. This is also dependent on the company's continued sports marketing strategy.
From the perspective of the company's new business, it is expected that in the next three years, the company's new business will increase by 20% and 17% respectively. In the middle of this, the forecast of the company's overall growth is also a positive.
From the point of view of cost, due to the rapid growth in revenue in the next three years, we expect that the company's sales cost will play a certain role. The management cost is expected to maintain a stable level. So overall, we expect that in the next three years, the company's gross profit margin can achieve a growth of 15%. The long-term valuation is about 15 times, which corresponds to a market value of about 50 billion. It is also a highly recommended investment balance.
As for the risks, the overall competition in the black chain industry is still fierce. If the short-term competition intensifies, this may affect the overall profit trend of the company. If the price of the panel appears to rise significantly, it may also affect the company's short-term profitability. But as mentioned before, in fact, from the current situation, the first is that the price of the panel has gradually declined.
On the other hand, due to the extreme situation, the possibility of a short-term growth of the future panel may be relatively reduced. On the other hand, there is the risk of geopolitics. This may cause a certain burden on the company's expansion in overseas business.
However, as I mentioned before, due to the well-established industry layout in the overseas market, the market concerns about the additional taxes in the overseas market are relatively low. That's all for my report today. Thank you all.