Recently, Shenzhen Konka A (000016.SZ), formerly known as Konka Group Co., Ltd., announced its intention to sell 70% of the shares held by Hongqiao Jiacheng Company at a minimum price of 4.145 billion yuan. The proposal is set to be approved by the company's general meeting of shareholders. This move is part of a broader trend where Shenzhen Konka A has been actively divesting assets in recent months. According to its semi-annual report, the company reported negative net cash flow from operating activities and losses from its core business, raising concerns about its financial health and liquidity. Despite an operating income of around 10 billion yuan, the company’s profit margin remains below 1%, prompting questions about its performance. What percentage of revenue comes from TV sales? How effective is its diversified investment strategy? And what industries are contributing to its profits? The "Investor" reporter reached out to Shenzhen Konka A for clarification and received direct responses. Konka's Asset Sale Shenzhen Konka A recently held an extraordinary general meeting to approve the transfer of 70% of its shares in Hongqiao Jiacheng Company, with a minimum sale price of 4.145 billion yuan. The proposal was approved by 98.98% of shareholders. Hongqiao Jiacheng, established in 2016, is a joint venture between Shenzhen Konka A and OCT Group. Shenzhen Konka A owns 70% of the company, while OCT holds 30%. The project focuses on urban redevelopment of Konka's former headquarters site. However, the initial plan to sell 49% of the shares was rejected by 64% of minority shareholders, leading the company to increase the stake to 70% and remove OCT's right of first refusal. Shenzhen Konka A has also been selling other assets. On August 24, it announced the sale of three properties in Shanghai for approximately 16.51 million yuan. Earlier, in May 2017, it sold 22.935% of Bioray Optoelectronics for 120 million yuan, and in June, it sold a 51% stake in Kunshan Konka Electronics for no less than 224 million yuan. Altogether, these transactions are expected to raise around 4.5 billion yuan. A company source explained that the asset sales aim to optimize asset allocation, improve liquidity, and support the company's main business development. Tight Capital Chain According to Shenzhen Konka A's 2017 half-year report, operating income rose by 32% year-on-year to 11.4 billion yuan, but net profit only increased by 141% to 30.87 million yuan. However, the net loss attributable to parent company shareholders dropped by 55% to 44.46 million yuan. This discrepancy highlights underlying financial pressure. The company attributed the decline in gross profit margins to rising material costs and intense market competition. In the first half of 2017, TV sales accounted for about 48% of total revenue—its lowest level in five years. Additionally, net cash flow from operations fell by 1703% year-on-year to -2.3 billion yuan, and current liabilities surged by 3.4 billion yuan. With several large projects underway, including the Kunzhuang Shuiyue Zhouzhuang and Konka Kechuang Center developments, the company faces significant funding challenges. It claims these investments are necessary for long-term growth. Diversification Strategy Shenzhen Konka A has expanded into various sectors beyond traditional TV manufacturing. It has invested in smart card technology, upstream suppliers, and plans to launch a 5 billion yuan industrial fund focused on TMT, smart manufacturing, and new energy sectors. Despite these efforts, the company's low profit margin remains a concern. While it is developing supply chain management and logistics services to enhance cost control and create new revenue streams, the results have yet to materialize significantly. Challenges Ahead Once a dominant force in China’s TV industry, Shenzhen Konka A now faces internal instability and a slower response to market changes. Its leadership has seen frequent turnover, and both product innovation and marketing strategies appear to lag behind competitors. As it continues its transformation, many wonder whether these changes will ultimately help or hinder its recovery. For now, the company remains in a critical phase of repositioning itself in a highly competitive market. Interface Encoders Decoders Converters Interface Encoders Decoders Converters,Integrated Circuit Oem Dip Original,Temperature Sensor Ic,Pptc Resettable Circuit Protection Fuse Shenzhen Kaixuanye Technology Co., Ltd. , https://www.icoilne.com