As of February 13, Sichuan Changhong has made headlines by officially integrating its AI television with DeepSeek, a notable advancement in the tech landscapeThis remarkable AI TV has introduced two distinct operational modes: "Deep Thinking (Full Power R1)" and "Fast Response." This innovation marks the debut of the world's first AI TV capable of profound analytical thinking, suggesting that Changhong is striving to reclaim its share of the market that has seen fierce competition in recent years.

Following this announcement, the stock of Sichuan Changhong hit its limit-up threshold, exhibiting a remarkable surge in investor confidenceNot long ago, the company's market capitalization soared back to record heightsJust in October, the once-dominant TV manufacturer saw its stock price skyrocket by an extraordinary 178% in a single month, capped by an impressive eleven consecutive trading days of gains—a phenomenon unprecedented in the company’s 30-year history.

However, while this resurgence is notable, it’s crucial to recognize that the peak Changhong has reached now pales in comparison to the industry’s leading playersTo contextualize this, we must travel back to the 1990s, a period before the emergence of tech giants like Huawei and the early stirrings of the internet ageAt that time, the Chinese economy’s most lucrative sector revolved around household appliances, particularly televisions.

In 1998, China's annual television production hit an impressive 35.13 million units, establishing the nation as the world’s leading manufacturer of television setsTelevision sales accounted for about 1% of China's GDP, making it a pivotal pillar of the national economyIt was during this flourishing period for the television industry that Sichuan Changhong reigned supreme.

Under the visionary leadership of Ni Runfeng, Changhong surpassed all international brands and claimed the title of China’s best-selling color television manufacturer as early as 1990. For the next twenty years, Changhong continued to dominate the market, capturing a market share that sometimes surpassed 35%.

The company recorded a staggering net profit of 2.612 billion yuan in 1997, earning the distinction of being the most profitable company on the A-share market at the time

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Such profitability placed it ahead of its closest competitor, Baosteel, which reported a net profit of 2.25 billion yuan for that yearThe company’s financial success allowed Changhong to ascend to the top of the A-share market capitalization leaderboard and be recognized as a genuine blue-chip stock.

However, the dawn of the 21st century brought rapid economic transformation to ChinaIndustries such as real estate, technology, and renewable energy flourished, leading to a noticeable decline in the once-thriving television sectorNow, the significance of television manufacturing within the national economy has diminished significantly compared to its prominence over two decades ago.

By the midway point of 2024, data revealed a disheartening trend for the television market in mainland China, with brand shipments plummeting to 16.39 million units—a 4.2% decrease from the previous year, marking the lowest point in a decadeThis figure is less than half of that experienced in 1998, while the television industry's production and sales now account for merely 0.02% of GDP.

Amidst this downward trajectory, Sichuan Changhong experienced setbacks due to poor decision-making during its business dealingsFor instance, the company suffered a staggering loss of 3.681 billion yuan in 2004 due to bad debts incurred from collaborating with APEXAdditionally, the company misjudged market trends with plasma televisions, leading to another major loss of 1.976 billion yuan in 2015. Recent statistics indicate that its television sales have been surpassed by competitors like Hisense and Xiaomi, resulting in a slip to a fifth-place ranking in the industry, with a currently estimated market share falling below 10%.

Once the darling of A-share investors, Changhong’s resurgence helped it regain some market capital, but when compared to A-share giants boasting market caps upwards of a trillion yuan, it appears relatively insignificant

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Even Gree Electric Appliances, with a market capitalization a mere tenth of Changhong’s back in the day, now stands at over 240 billion yuan—over three times Changhong's current valuation—having increased by more than thirty times since 1998.

In terms of profitability, Changhong’s financial standing starkly contrasts with today's corporate titansIn 2023, the company reported a net profit of 688 million yuan, which is less than one-third of its peak earningsComparatively, the state's banking behemoths report net profits exceeding one hundred billion yuan, while new market leaders such as Kweichow Moutai and CATL report profits in the hundreds of billions, far surpassing the once-leading profitability of Sichuan ChanghongNotably, Gree Electric, which had previously netted only one-tenth of Changhong's profit, achieved a net profit in excess of forty times that of Changhong in 2023.

In response to the shifting tides of the industry, Sichuan Changhong has initiated a diversification strategy, evolving into a company that is no longer solely defined by its television business.

The latest mid-year report of 2024 indicated that revenue from televisions contributed 7.7 billion yuan to Changhong’s total, accounting for a mere 14% of overall earnings; in stark contrast, the television segment used to represent over 80% of the company’s total revenue two decades earlier.

In recognition of the decline in its television business, Changhong has pushed forward with its diversification effortsOver the past twenty years, the company has ventured broadly, attempting to capitalize on various trends from real estate and logistics to artificial intelligence and emerging low-altitude economic opportunitiesAnalysis from Tonghuashun disclosed that Changhong is engaged in a staggering 56 diverse business concepts, ranking it fifth among A-share companies.

Currently, the largest revenue source for Changhong is its IT products and services division, which recognized 17.7 billion yuan in revenue during the first half of 2024—a year-on-year increase of approximately 16.31%. This segment has now surpassed its traditional television business, becoming the primary driver of revenue growth for the company.

After many trials and tribulations, Changhong's operational metrics have displayed improvements in recent years

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