Konka Group, once a celebrated “national color TV brand,” has found itself in its most challenging phase since going public, following years of declining performance.

Wind data reveals that Konka’s revenue has been on a downward trend since peaking at 55.119 billion yuan in 2019, plummeting to just 9.835 billion yuan by 2025—the lowest level since 2003. Net profit attributable to the parent company’s shareholders turned negative starting in 2022, with a loss of 1.471 billion yuan that year, widening to 12.582 billion yuan by 2025.

Even more alarming is the deterioration of the company’s financial health. By the end of 2025, Konka’s net assets stood at -6.083 billion yuan, with a debt-to-asset ratio of 126.22%, marking the first time its liabilities exceeded its assets. The company’s stock was also renamed “*ST Konka A” due to delisting risk warnings and other financial alerts.

Konka’s transition from a CRT-era leader to a struggling entity mired in losses is no accident but the result of a prolonged period of decline.

Strategic Dilemma

On July 6, 2026, an announcement by Konka Group once again drew public attention.

The announcement disclosed the final arbitration result of a three-year performance dispute with former shareholders of Jiangxi Konka New Materials Technology Co., Ltd., including Zhu Xinming. Originally seeking 939 million yuan in compensation, Konka ultimately received only 61.2 million yuan in performance compensation and was required to bear 60% of the arbitration costs.

This arbitration case, where Konka “won the lawsuit but lost money,” reflects the awkward predicament of its expansionary impulses and strategic missteps in recent years.

Since 2017, Konka has pursued bold diversification, venturing into nearly twenty industries, including smart home, new energy, new materials, big health, semiconductors, industrial parks, and environmental protection. It primarily entered these new sectors through mergers and acquisitions or auctions, with Jiangxi Konka being a significant acquisition during its transformation.

However, cross-industry expansion without core technological backing failed to deliver the expected performance growth, instead leaving substantial operational risks.

From a business layout perspective, color TV manufacturing differs significantly from new materials, semiconductors, industrial parks, and environmental protection in terms of industry systems, technological barriers, customer bases, and operational logic. If cross-border businesses do not generate new profit growth points or complement existing industries, diversification deviates from its original purpose of “diversifying risks and broadening development space,” becoming a heavy burden for the group.

Even more troubling is that while new businesses failed to take off, the core business nearly collapsed.

In 2025, the consumer electronics sector, accounting for 90.67% of revenue, generated 8.918 billion yuan, a 12.02% year-on-year decline. The primary driver was a 16.62% drop in color TV revenue to 4.192 billion yuan, the main factor dragging down overall performance. White goods revenue fell 7.56% to 3.815 billion yuan.

This veteran enterprise, which once thrived on color TVs, suffered greatly in its core business due to prolonged strategic misalignment and uneven resource allocation.

Industry Transformation

Konka’s decline also reflects significant shifts in China’s TV industry landscape.

Domestic market demand has peaked, with the color TV industry entering a phase of mature competition. According to AVC Revo’s “2025 Global Color TV Market Report,” China’s color TV retail volume reached approximately 27.63 million units in 2025, a 10.4% year-on-year decline, falling below the 30-million-unit threshold and hitting a ten-year low.

Under these circumstances, leading companies have chosen “high-end” and “global” strategies to secure growth, but Konka has “lost ground” in these key battlegrounds.

In global markets, cutting-edge, high-end technologies have become crucial for breaking through. Mini LED is one of the primary high-end technological routes in the TV industry. According to TrendForce, global Mini LED TV shipments reached approximately 11.56 million units in 2025, a 50% year-on-year increase, hitting a record high.

In the high-value segment, domestic leaders dominate, with TCL and Hisense accounting for 64% of the global market share. Leveraging their leading display technology advantages, they have successfully penetrated overseas markets such as Europe, the Americas, and Southeast Asia, boosting overseas revenue and profitability.

While Konka has intensified its global expansion efforts, its overseas revenue remains relatively small. It lacks advanced technologies to support overseas products and has yet to establish a complete channel and brand operation system to offset declining domestic sales.

Meanwhile, the domestic market’s trends toward high-end and ultra-large-screen products have become more pronounced. According to AVC data, in 2025, online and offline retail volumes of TVs sized 75 inches and above accounted for 38.1% and 55.6% of the market, respectively, increasing by over 36.4 and 52.1 percentage points from 2019.

However, Konka has a weak presence in this high-value market, with limited visibility for its high-end products, unable to compete with leading brands. It has been forced to hold on to the low-margin mass market, with profit margins continuously squeezed.

The color TV industry has evolved beyond simple hardware assembly, entering a new phase where core display technologies, smart systems, and holistic ecosystems serve as primary competitive points. The fundamental logic of industry competition has shifted, further highlighting Konka’s shortcomings.

Capital Woes

Accompanying substantial losses, Konka’s long-standing issues have begun to surface.

From receiving minimal compensation in the 939 million yuan performance dispute to a series of lawsuits arising from the Kai Kai Shi Jie share buyback and investigations into former executives for suspected serious violations, Konka is currently experiencing intense “aftershocks.”

Konka’s difficulties coincide with the accelerated professionalization and consolidation of central SOEs.

In April 2025, former controlling shareholder OCT Group signed a share transfer agreement with China Resources. By July, all share transfers were completed, with OCT’s approximately 30% stake in Konka transferred to Panshi Runchuang under China Resources. China Resources thus became Konka’s actual controller.

In response to Konka’s issues, China Resources implemented breakthroughs in three areas: capital, management, and business.

The first step was providing financial support to stabilize the situation. According to investor relations records from September 2025, China Resources offered Konka a 3.97 billion yuan low-interest loan with an annual rate of around 3%. Of this, 2.17 billion yuan was used to repay debts and interest owed by former controlling shareholder OCT, while 1.8 billion yuan covered external interest-bearing liabilities and daily operational funds.

The second step involved a complete management overhaul and the reestablishment of internal control systems. During the August 2025 board renewal, China Resources occupied four non-independent director seats. Wu Jianjun, former chairman of China Resources Pharmaceutical Commercial, assumed the chairmanship, while Yu Huiliang was appointed CFO.

Subsequently, president Cao Shiping and vice president Yang Bo resigned, with Dong Gang and Yao Erfang, both from China Resources’ legal and compliance departments, taking over as vice presidents and general counsel, respectively.

The third step was divesting non-performing assets and refocusing on core businesses. Assets such as the Dongguan old factory real estate project, Chuzhou health and wellness town, and Nanjing Yunwang Industrial Park—all characterized by high investment, long payback periods, and persistent losses—were earmarked for disposal.

China Resources’ “radical” approach has stabilized Konka’s management order in the short term. However, long-standing issues such as asset impairments from billion-yuan losses, pending lawsuits, and delisting risks remain unresolved.

Path to Breakthrough

The management overhaul at Konka has brought new changes and hope to this veteran home appliance company.

Organizationally, Wu Jianjun’s appointment as Konka Group chairman signifies the company’s entry into a new era led by China Resources.

Wu, with experience in large central SOEs and a focus on refined management and risk control, will help Konka establish more standardized and transparent internal control systems and accelerate the resolution of legacy financial and governance issues. Additionally, veteran Konka employee Cao Shiping, as president, is responsible for aligning existing businesses with future strategies while ensuring uninterrupted operations.

This “external control, internal stability” structure reflects China Resources’ emphasis on risk management while considering business continuity. It provides organizational assurance for subsequent asset activation and a return to core businesses.

From a product perspective, the company is exploring growth through “micro-innovations.”

To address the increasing complexity of smart TV operations, Konka launched new products equipped with a “Trinity Remote Control,” earning the first “Convenient TV Viewing” certification from the National Radio and Television Administration. It aims to capture a share of the silver economy and home accessibility renovation market. However, objectively, relying solely on incremental product improvements cannot rapidly transform the overall situation.

For *ST Konka, true breakthroughs require more than product upgrades or personnel changes. Future success hinges on securing tangible support from China Resources in terms of capital and channels. It also demands that Wu Jianjun and his team fully break existing organizational inertia, applying lean thinking across R&D, production, and supply chains to enhance overall operational efficiency.