On August 22|Skyworth Digital (000810.SZ) released its 2019 semi-annual report, achieving operating income of 3.884 billion yuan, an increase of 5.22%; net profit attributable to shareholders of listed companies of 258 million yuan, an increase of 61.26%; net profit attributable to shareholders of listed companies deducting non-recurring profit and loss of 222 million yuan, an increase of 56.73% over the previous year; basic earnings per share of 0.2465 yuan, with a cash dividend of 0.8 yuan (tax included) for every 10 shares.

During the reporting period, the company's digital smart boxes and network access devices achieved revenue of 2,917 billion yuan, an increase of 2.13% over the previous year. The company's smart terminal business shows a pattern of mutual promotion and competition in the three major domestic market segments: (1) The domestic radio and television operator market actively promotes the construction of smart home application scenarios such as smart homes, the Internet of Things, and security engineering, as well as the development of businesses such as Xueliang Engineering, smart government enterprises, and smart distance education. The company deepens the layout of 4K ultra-high-definition smart boxes and radio and television products such as PON, cable modems, ONU, and home gateways. Actively expanding emergency broadcasting, system integration services, video conferencing systems, and related commercial display products, etc., to attract customers, such as ultra-high definition (4K) (HD) Smart terminals such as interactive set-top boxes, value-added services for users, and startup advertising operations are in full swing. (2) In the three major domestic communication operator markets, a variety of smart terminal products (including IPTV, IPTV+OTT, OTT, PON, access devices, smart gateways, intelligent networking products, etc.) won bids at the operator group headquarters and landed in all provinces; at the same time, the distribution capacity of customers at the provincial, municipal, and even county levels has been further improved, and the company has become the main supplier of China Unicom's intelligent gateway products; China Mobile Group's digital home alliance strategic partner; pan-smart terminal field, such as smart door locks, smart speakers, Smart cameras and the like have been shortlisted by China Mobile Group. (3) The Internet OTT retail market, despite being influenced by the IPTV business of the three major communication operators and the popularity of smart TVs, the company continued to invest in research and development. During the reporting period, it launched differentiated products such as Skyworth's small AI box, Penguin Aurora projector, Skyworth Xiaopai series projector, and smart box, which continued to enhance its influence in the industry. Based on self-operation and distribution, online channels such as JD and Tmall have built new channels such as Suning Tesco, etc., the online JD platform has been at the forefront of the industry, offline optimization of agent policies and channel construction, and sales revenue of Internet OTT box products continued to grow during the reporting period; (4) Global overseas markets, during the reporting period, the company achieved batch supply in overseas markets in India, Africa, Southeast Asia, Europe, Latin America and other regions. The market position in Asia, Africa and Latin America has maintained a stable market share, further improving pre-sales planning and project delivery capabilities for leading global operators.

Under the current severe market situation, the company's automotive intelligent electronics achieved revenue of 157.679 million yuan in the first half of 2019, a year-on-year decrease of 86.04%. On the one hand, the company has actively expanded core customer projects and obtained product development opportunities; on the other hand, the adjustment strategy is dominated by in-vehicle display systems, intelligent host systems, image security systems and intelligent connectivity systems, focusing on core car manufacturers and core projects. The products cover displays, intelligent central control, LCD meters, driving recorders, streaming media rearview mirrors, T-boxes, etc.

During the reporting period, intelligent manufacturing (LCD devices) achieved revenue of 619 million yuan, an increase of 84.62% over the previous year. Its business covered small to medium LCD display modules, OLED display modules, POS machines, etc., and achieved stable mass production of full screens and special-shaped screens. It also actively expanded customers such as non-mobile special displays, commercial displays, light bars, TVs, vehicles, industrial control, etc., LCD devices and ZTE, Wingtai, Samsung, audio, Huqin, Longqi, Jingdong, LG, Liandi, Yingwang, Youbo, HuiXN, Xiner, etc. Strategic partnerships with Dudu and other customers have been further deepened, with the addition of Innolux and Korea LUMENS and other customers.

During the reporting period, the company acquired Skyworth Qunxin Security, and its revenue for the first half of 2019 was 102 million yuan. Focusing on the development of smart cities and smart communities, the security industry and the commercial display industry have maintained a growing trend. Chuangwei Qunxin Security mainly focuses on professional displays, smart offices, smart locks and other businesses. The main products cover monitors, large LCD splicing, indoor and outdoor LEDs, advertising machines, commercial displays, intelligent interactive conference screens, smart door locks, etc. The service customers include provincial and municipal government agencies, museums, science and technology museums, subway projects, enterprises (such as Huawei, CMB, Huaxia Bank, etc.), China Mobile, China Unicom, radio and television media centers, etc. With the gradual spread of 5G and IoT services, the commercial application of smart cities will usher in a huge breakthrough. Using technologies such as cloud computing, mobile Internet, Internet of Things, and big data, smart city construction has penetrated into various industries. New scenarios are being explored more and more, such as smart education, smart retail, smart government, safe cities, smart healthcare, smart finance, smart transportation, etc., and Skyworth Qunxin Security is gradually expanding from a single display terminal to a provider of overall system solutions.

During the reporting period, all sectors of the company's value-added services continued to develop steadily, and service forms were further enriched. (1) Carrier user advertising platform. The company grasped the needs of radio and television operators to tap user value and develop value-added services and advertising resource operations for special users. During the reporting period, the company established advertising operation partnerships with radio and television operators and communication operators in Guangdong, Chongqing, Jiangsu, Guiyang, Guangxi, Shenzhen and other provinces and cities, covering about 40 million users (including high-definition and 4K ultra-high-definition two-way set-top box end users), with more than 7 million daily active users; (2) Broadcast+education system cloud platform. The company innovatively developed and launched an intelligent radio and television+education system cloud platform in due course. Live interactive classroom products were launched in schools in Jiangsu, helping to build a “smart radio and television +” ecosystem. (3) Internet+Wi-Fi value-added service operation platform. During the reporting period, the self-built Wi-Fi operating platforms covered 90 hospitals across the country, taking over the Wi-Fi value-added service operation platforms of communication operators (Jiangsu Telecom's smart city Wi-Fi operating platform covered 10 cities). Operators' ability to monetize output traffic was improved during the reporting period, and big data collaborated to achieve accurate traffic volume access and was recognized by users, forming an overall closed loop of Wi-Fi user traffic acquisition, traffic diversion, and traffic monetization; (4) The smart box-terminal is an independent 64-OS value-added service platform for all media users. As of June 2019, the number of PIOS all-media monthly payment users increased by 137% compared to the end of the previous year, and the cumulative number of registered users increased by 140% over the end of the previous year; (5) Home manager style O2O door-to-door service platform. ① The operator business is progressing smoothly, digging deeper into the brand service market and achieving significant growth; ② Overseas service localization advantages are obvious, and service subsidiaries in South Africa, India and Malaysia continue to make profits, adding to the Thai market.