By: Liu Xiaoran, AI Business Club
Edited by: Yang Shufang
Konka has recently been actively selling off its assets. On September 27, the company released an announcement regarding the completion of industrial and commercial change registration for the transfer of shares in Kunkang Corporation, a wholly-owned subsidiary. Konka sold 51% of its stake in this subsidiary.
Just days before, the company had also begun to divest other assets. On August 24, it announced plans to transfer 70% of its shares in Kangqiao Jiacheng Company, as well as three properties located at No. 5, Lane 25, Huihe Road, Hongkou District, Shanghai, to a property rights exchange. In May, Konka sold 22.935% of its shares in Bioray Optoelectronics (Shanghai) Co., Ltd. Altogether, these sales have generated nearly 4.5 billion yuan in proceeds.
This aggressive asset disposal raises questions about whether Konka, once a dominant player in the home appliance industry, is now facing a crisis of liquidity or capital chain breakdown. However, the company’s actions are closely tied to its ongoing business transformation.
From Brilliance to Turmoil
Konka was originally established in 1979 as Guangdong Overseas Chinese Electronic Industry Co., Ltd., a Sino-Hong Kong joint venture with a first-phase investment of HK$43 million. It quickly grew into one of China’s most prominent electronics manufacturers. By the early 2000s, Konka had become the top-selling color TV brand in China, dominating the market for five consecutive years. Its TVs were a household name across the country.
However, the next decade brought significant challenges. The rise of internet-based brands like LeTV and Xiaomi, along with declining demand for traditional TVs, began to erode Konka’s market share. At the same time, internal turmoil plagued the company. A power struggle between major shareholders and small investors led to dramatic leadership changes, resulting in a sharp decline in performance. By 2015, Konka reported a net loss of 1.257 billion yuan, a staggering 2488% drop from the previous year.
Despite these struggles, Konka continued to explore new growth opportunities. It launched an internet TV brand called KKTV, invested in OLED technology, and sought to integrate content services. However, it struggled to match the marketing power and content libraries of competitors like LeTV.
Moreover, Konka’s R&D investment remained low—no more than 1.3% of revenue for four consecutive years—falling behind rivals such as Hisense. Once a leader in high-tech manufacturing, the company found itself struggling to find new technological breakthroughs.
Light Asset Transformation
In recent years, Konka has shifted focus toward a “light asset†strategy. Despite a 32% increase in operating income in the first half of 2016, the company faced tight cash flow and declining gross margins. The main TV business saw a 1.45% drop in revenue and a 0.53% decrease in gross profit margin compared to the previous year.
Faced with mounting pressure, Konka began to diversify. Chairman Liu Fengxi stated that the company would no longer be just a TV manufacturer but would transform into an investment holding platform. Konka also announced plans to spin off its heavy asset businesses, aiming to reduce its reliance on traditional manufacturing and seek new growth through investments and incubation.
The financial report highlighted several projects requiring significant funding. For example, the old factory reconstruction project had only reached 14.73% progress with 1.016 billion yuan invested. Meanwhile, Konka was also acquiring stakes in smart card companies, tech firms, and setting up a large-scale industrial fund focused on emerging industries like smart manufacturing, new energy, and healthcare.
According to Zhou Bin, Konka’s president, the company aims to build an IoT ecosystem through mergers, acquisitions, and R&D. Liu Fengxi emphasized that separating the TV business would allow Konka to focus more on strategic capital operations and macroeconomic decision-making.
A New Era for Konka
With its shift toward an investment-driven model, Konka is redefining itself. While it may no longer be a familiar appliance brand to consumers, the company is undergoing a radical transformation. Whether this will lead to a successful rebirth remains to be seen, but one thing is clear: Konka is no longer the same company it once was.
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