The "Color TV King" with a Hundred Billion Market Value is Trapped in OEM Manufacturing

"With strength to uproot mountains and spirit to overawe the world, yet ill - fated, my steed won't run." Xiang Yu's elegy seems oddly fitting when applied to today's Sichuan Changhong.

Recently, an ordinary - looking announcement has brought this "Color TV King" back into the public eye. Changhong Meiling issued an announcement stating that it has decided to suspend the Hefei Changhong Smart Home Appliance Industrial Park project because the existing production capacity can meet the demand of sales orders for the time being.

However, a year ago, when Changhong Meiling proposed to expand production capacity, the reason given was that "the efficiency improvement and transformation of the old production lines could no longer meet the continuously growing demand of the refrigerator market." In just one year, the situation has changed to "sufficient production capacity", which shows the intensity of market competition.

Of course, neither expanding production nor halting production is a new thing. But if we look at it in the context of the financial reports of Changhong Meiling and its parent company, Sichuan Changhong, we may see the anxiety behind the suspension of production expansion - there isn't enough money.

In 2025, Sichuan Changhong's revenue was 108.8 billion yuan, a year - on - year increase of 4.94%. However, its net profit after deducting non - recurring gains and losses was only 90.64 million yuan, a year - on - year decrease of 78%. The real profit scale of the group is less than 1% of its revenue.

It's true that the household appliance industry has been in a difficult situation in recent years. But as the former "Color TV King", Changhong works hard but doesn't make much money. It seems hard to simply attribute this to the "industry winter".

By looking through this billion - yuan financial report, we can see where Changhong's foundation is "hollow".

Reduced to a "Worker" in the Home Appliance Industry

In 2025, Sichuan Changhong's net profit was 988 million yuan, a year - on - year increase of 40%. At first glance, it seems quite good.

However, when looking at the financial report, its net profit after deducting non - recurring gains and losses was only 90.64 million yuan, a year - on - year decrease of 78%. This shows that the company's main business didn't make much money, and its profit mainly came from non - recurring gains and losses:

Firstly, the fair value of Huafeng Technology held by the company increased by 1.055 billion yuan; secondly, the government provided 274 million yuan in subsidies.

Changhong's first - quarter report in 2026 was even worse. The company's revenue was 27.276 billion yuan, a slight year - on - year increase of 1.64%. The net profit was 98.48 million yuan, a year - on - year decrease of 71.5%; the net profit after deducting non - recurring gains and losses was 30.335 million yuan, a year - on - year decrease of 78.08%.

Sichuan Changhong has a revenue of tens of billions, but its real profit is extremely thin. It's needless to say how hard this business is.

As early as 1998, Sichuan Changhong's profit scale had reached 2 billion yuan. Now, although the company's revenue has increased several times, its profit is even less than before. This is not only because of the downturn in the home appliance industry, but also because Changhong has chosen the most difficult path - contract manufacturing.

According to the financial report, in 2025, the core revenue source of Sichuan Changhong was the home appliance business, and its smart home revenue accounted for 42.08% of the total revenue.

However, it should be noted that the gross profit margin of Changhong's smart home business is only 11.9%, which is far lower than the average comprehensive gross profit margin of 26% - 30% of Midea, Gree, and Haier.

The problem lies here. Although the annual reports of Sichuan Changhong and Changhong Meiling do not directly mention "contract manufacturing", it is well - known that Changhong is an important partner of Xiaomi. It has long been an open secret that Changhong manufactures air - conditioners for Xiaomi on an OEM basis.

As early as 2017, Changhong Air - conditioner started to provide OEM services for Xiaomi. In recent years, the cooperation between the two sides has deepened. Since 2022, Changhong Hongyuan Base has officially undertaken the joint development tasks of some Xiaomi projects.

According to the calculation of Huachuang Securities, in 2023, the OEM revenue from Xiaomi accounted for more than 50% of Changhong Meiling's domestic air - conditioner sales revenue. It should be noted that Sichuan Changhong's refrigerator, air - conditioner, washing machine, kitchen and bathroom appliances and other businesses are all under the banner of Changhong Meiling.

Last year, Shan Lianyu, the general manager of Xiaomi Group's home appliance department, also issued a post announcing that Xiaomi Smart Home Appliances had reached a strategic cooperation with Changhong Air - conditioner, and said that "manufacturing is not a solo fight, but about trust and progress together".

In the context of the shrinking home appliance industry, especially the color TV market, it is understandable that Changhong has embraced its allies tightly.

According to the report of Aowei Ruiwo, in the first quarter of 2026, the global TV OEM shipments were nearly 24.3 million units, a year - on - year increase of 2.9%. Changhong and TPV tied for second place with 2.7 million units each.

However, the problem is that after changing from the "Color TV King" to the "OEM King", Sichuan Changhong's gross profit margin dropped from 11.54% in 2023 to 9.42% in 2025, hitting a record low.

In response, Changhong Meiling once told the media that although the profit from OEM is low, it is still higher than that from self - operated business. It can be seen that Changhong has simply chosen the relatively better option among two less - than - ideal choices.

But how did the once "Color TV King" end up as the "strongest worker" in the home appliance industry?

The "Color TV King" Is in the Past

Looking back at Changhong's business history, the most regrettable thing is its all - in bet on plasma technology back then. This battle also became the turning point in Changhong's fate.

Going back to 1985, Changhong was also in the limelight.

In an era when televisions were still luxury items, Changhong introduced the first color TV production line in China from Japan. Relying on the foundation of a military factory and the strategy of "high - quality and low - price", it quickly captured the domestic market.

Since 1990, Changhong has maintained the top sales position in the domestic color TV market for 20 consecutive years, and its market share once exceeded 35%.

However, since 2010, Changhong has been on a downward trend and gradually fallen into the second - tier camp. According to data from Luotu Technology, in the first quarter of 2025, Changhong's shipments were only 780,000 units, falling out of the top five in the industry.

The weakness of the color TV market is a well - known reason. However, Changhong's decline may have started earlier.

In the mid - 1990s, the color TV industry launched a technological revolution, researching and developing technologies such as rear - projection, plasma, and liquid crystal, trying to replace traditional CRT TVs and bring a new generation of color TVs with thinner, larger screens and higher - definition pictures.

In this technological competition, Sichuan Changhong chose plasma technology as its main direction and invested more than 4 billion yuan in building a plasma panel production line. As we know, LCD TVs quickly reduced the cost of TVs and rapidly occupied the market.

Changhong made the wrong bet and missed the crucial period of technological transformation. By the time it realized its mistake, competitors such as Hisense, Skyworth, and TCL had already carved up the market and completed both technological and market positioning.

Changhong not only lost the technological route but also an entire era.

After that, with the advent of the mobile Internet era, fewer and fewer users are willing to sit in front of the TV. In 2025, the retail volume of TVs in China dropped to 27.63 million units, more than 46% lower than the peak of 50.89 million units in the past decade. Changhong's situation has become even more difficult.

During this period, Changhong also tried to pursue a diversified path, but with little success.

According to the financial report, in 2025, apart from the smart home business, the ICT products and services (accounting for about 40% of the total revenue) ranked second in terms of proportion. It mainly provides intelligent distribution and solution services for ICT products. However, as a distributor, Changhong lacks core barriers, and the profit quality of this business is worrying, with a gross profit margin of only 3.43%.

In addition, in recent years, Changhong has actively developed intelligent businesses, including low - altitude flight, robotics, and the metaverse. However, according to the financial report, the revenue from special businesses last year was only about 3.03 billion yuan, which is not enough to support the entire group.

So, it's not hard to understand why the former "Color TV King" is willing to become the "OEM King".

Given Changhong's lack of market competitiveness, contract manufacturing for emerging brands is currently its most practical choice - large - scale and stable business, which can at least keep the company afloat. But the question is, how long can this situation last?

Difficult to Make a Mark in AI Transformation

In the business world, no interest relationship is static.

In the past three years, the combined sales amount of Changhong Meiling's top five customers has accounted for more than 50%. Once an important customer withdraws, it will have a significant impact on Changhong.

However, in October last year, Xiaomi Smart Home Appliance Factory was put into operation in Wuhan Optics Valley, planning to gradually expand from air - conditioner production to other home appliance categories; in 2024, Walmart acquired the American TV manufacturer Vizio and became the largest TV brand in the United States.

As the OEM factory for Xiaomi and Walmart, Changhong naturally faces the risk of being replaced. Whether this will ultimately happen is just a result of weighing the pros and cons.

Facing this uncertainty, Changhong doesn't want to sit back and wait for its fate. It has started to actively layout intelligent and high - end products.

In 2023, Sichuan Changhong launched the world's first smart AI home appliance platform based on a large - scale model - "Changhong Yunfan AI Large - scale Model", which has core technologies such as large - scale model decision - making, multi - modal interaction, AI agents, scenario - based self - learning, and whole - house interconnection.

After that, Changhong has successively launched a series of AI home appliances, such as the first healing - themed AI TV - the Q10Air TV of the Chasing Light series, which has functions such as AI voice, intelligent search, AI picture quality, AI interaction, and content recommendation.

However, the sales volume of this flagship model priced at over 10,000 yuan is only in single - digits on Changhong's Tmall flagship store.

On social media, the mural - series products supported by the Yunfan large - scale model have received a lukewarm response. Some users think that the actual product does not match the promotion, and some users complain about the user interface.

Currently, the main revenue of Changhong TVs still comes from mid - and low - end products priced below 3,000 yuan, which is to some extent affected by the previous low - price strategy.

For example, in 2020, Changhong first launched 8K TVs. At that time, the average market price was generally over 10,000 yuan, while Changhong priced its 55 - inch TV at 3,999 yuan. Although this cost - effective strategy boosted sales, it also labeled Changhong as a "low - price brand".

Moreover, Changhong frequently appears on the OEM lists of Internet home appliance brands such as Xiaomi. When the brand is deeply associated with "low price", it will be even more difficult to move upmarket and tell high - end stories.

For Changhong, contract manufacturing is a practical but also a contradictory choice - the contract manufacturing business gives Changhong a chance to breathe